Nicaragua

Retail cryptocurrency trading is legal and regulated in Nicaragua under a formal licensing regime overseen by the Central Bank of Nicaragua (BCN). The regulatory framework, established primarily through reforms to Law 977 and specific BCN resolutions, requires Virtual Asset Service Providers (VASPs) to register, obtain a license, and comply with strict AML/CFT obligations. While not legal tender, virtual assets are recognized as digital representations of value that can be used for payments and investments, provided transactions over $1,000 are reported.

I. Regulatory Status
* Retail cryptocurrency trading is legal and regulated under a formal licensing regime.
* The status is officially Allowed-Regulated.
* Virtual assets are not legal tender but are recognized as digital representations of value for payments and investments.

II. Key Regulatory Bodies
* Central Bank of Nicaragua (BCN):
* Primary regulator and licensing authority for Virtual Asset Service Providers (VASPs).
* Supervises VASP operations and approves banks to offer crypto services.
* Unidad de Análisis Financiero (UAF):
* AML/CFT supervisor; monitors compliance and receives transaction reports.

III. Important Legislation
* Ley de Reformas y Adiciones a la Ley N°. 977 (Law Against Money Laundering) (Ley N°. 1072 / Ley N°. 1215):
* Enacted May 12, 2021.
* Amended AML law to include VASPs as obligated subjects and empowered the BCN to regulate the sector.
* Reglamento de los Proveedores de Tecnología Financiera de Servicios de Pago y Proveedores de Servicios de Activos Virtuales (Resolution CD-BCN-XXV-1-22):
* Enacted April 27, 2022.
* Established specific operational rules, licensing, and registration procedures for VASPs.
* Normativa de Prevención, Detección y Reporte de Actividades Relacionadas con Activos Virtuales (UAF Resolution):
* Gazetted January 17, 2025.
* Imposed stricter surveillance rules for virtual asset transactions.

IV. Compliance Requirements
* VASPs must register and obtain a license from the BCN to operate legally; licenses are indefinite but non-transferable.
* Strict AML/CFT obligations apply, supervised by the UAF.
* A core requirement is the reporting threshold: transactions exceeding $1,000 (or equivalent) trigger specific identification and reporting duties to the UAF.
* VASPs must monitor and report 'unusual' or 'suspicious' transfers over $1,000, including monitoring IP addresses and beneficiary details.

V. Notable Restrictions or Limitations
* The regulatory environment is characterized by a high degree of state surveillance, with a low monetary threshold ($1,000) triggering detailed monitoring.
* While banks are legally permitted to offer virtual asset services with BCN approval, practical banking access for independent crypto users may be difficult due to de-risking concerns.
* The regulatory focus is heavily tilted towards AML/CFT compliance and state control rather than market development.

VI. Recent Developments or Notes
* The 2025 UAF resolution indicates a tightening of monitoring thresholds and surveillance requirements, not a relaxation of rules.
* The primary driver of regulation appears to be avoiding international blacklisting (e.g., by the FATF) due to Nicaragua's financial system being under scrutiny.
* The BCN's regulatory framework was updated in 2023 via Resolution CD-BCN-XLIX-3-23.