Papua New Guinea
Retail_Trading_Status
- Analysis ID
- #756
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- Latest
- Created
- 2025-12-12 04:59
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- e26e7b8f...
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Executive Summary
Cryptocurrency trading in Papua New Guinea exists in a regulatory gray area characterized by conflicting regulatory stances and operational banking restrictions. While the Securities Commission of Papua New Guinea (SCPNG) asserts that crypto assets fall under the Capital Markets Act 2015, the Bank of Papua New Guinea (BPNG) has issued public warnings stating they are not legal tender and are unregulated by the Central Bank. Major financial institutions, notably Bank South Pacific (BSP), have implemented bans on cryptocurrency-related transactions, citing AML/CFT risks and lack of consumer protection.
Key Pillars
Securities Commission of Papua New Guinea (SCPNG): Claims jurisdiction over crypto assets as 'capital market products' under the Capital Markets Act 2015.
Bank of Papua New Guinea (BPNG): Issues warnings that crypto is not legal tender and not regulated by the Central Bank; operates a Regulatory Sandbox.
Banking Sector Enforcements: Major banks like BSP block crypto transactions on Visa cards and accounts due to risk concerns.
Anti-Money Laundering (AML): Financial institutions apply strict AML/KYC checks, effectively excluding crypto businesses due to 'pseudonymous' risks.
Landmark Laws
Capital Markets Act 2015 (No. 22 of 2015) - Enacted: 2015-10-01
- The primary legislation governing securities in PNG. The SCPNG explicitly interprets 'crypto assets' as tradeable financial products falling under the provisions of this Act, although a specific licensing regime for retail crypto exchanges is not actively populated.
- Source
BPNG Public Notice on Cryptocurrencies (Public Notice) - Enacted: 2018-01-01
- A standing warning from the Central Bank advising the public that cryptocurrencies are not legal tender, are unregulated by the BPNG, and carry high investment risks.
- Source
Securities Commission Act 2015 (No. 21 of 2015) - Enacted: 2015-10-01
- Establishes the SCPNG and its powers to regulate capital markets, including the authority to issue directives on new financial products like digital assets.
- Source
Considerations
Banking Blockade: The largest bank, Bank South Pacific (BSP), explicitly prohibits the use of its Visa cards for cryptocurrency transactions, citing inability to verify transaction data.
Regulatory Conflict: A divergence exists where the Securities Commission claims oversight of 'crypto assets' while the Central Bank disavows regulation of them as currency.
CBDC Pilot: BPNG has successfully completed a Proof of Concept for a 'Digital Kina' CBDC using blockchain technology (Soramitsu/Hyperledger Iroha), indicating a preference for state-backed digital currency over private crypto.
Scam Prevalence: Regulators frequently issue warnings about Ponzi schemes masquerading as crypto investments, leading to a hostile compliance environment.
Notes
The reference to '2025' in some source snippets (e.g., MEXC, UEEx) appears to be SEO-generated content projecting future dates. However, the core regulatory facts (SCPNG Act 2015, BSP Ban 2022, BPNG Warnings) are verified by historical and official context. The 'Digital Kina' project is a verified initiative involving Soramitsu.
Remaining Uncertainties
- Whether the SCPNG will issue specific regulations or licenses for retail crypto exchanges under the Capital Markets Act 2015.
- If other commercial banks in PNG (Kina Bank, ANZ) enforce the same strict blockade as BSP.
- The timeline for the potential launch of the Digital Kina and its impact on private crypto regulation.
Detailed Explanation
Detailed Explanation
Papua New Guinea's cryptocurrency regulatory environment is definitively a Gray-Zone, characterized by conflicting regulatory stances and significant operational restrictions. The regulatory framework is fragmented, with the Securities Commission of Papua New Guinea (SCPNG) asserting jurisdiction over crypto assets as 'capital market products' under the Capital Markets Act 2015, which was enacted on October 1, 2015. This claim is rooted in the powers granted to the SCPNG by the Securities Commission Act 2015. However, this position is directly contradicted by the Bank of Papua New Guinea (BPNG), the central bank, which has issued a standing Public Notice on Cryptocurrencies since 2018, warning that cryptocurrencies are not legal tender and are not regulated by the BPNG. This regulatory conflict creates a fundamental uncertainty for market participants, as there is no clear, unified authority or active licensing regime for retail crypto exchanges. The practical landscape is further defined by stringent anti-money laundering (AML) and know-your-customer (KYC) requirements applied by financial institutions, which, due to perceived risks associated with pseudonymous transactions, effectively exclude most cryptocurrency businesses from the formal banking sector. The most significant operational barrier is the banking blockade enforced by major institutions, most notably the Bank South Pacific (BSP), which has explicitly banned the use of its Visa cards and accounts for cryptocurrency-related transactions, citing AML/CFT risks and an inability to verify transaction data. This hostile compliance environment is compounded by frequent regulator warnings about crypto-related Ponzi schemes. Notably, the BPNG has demonstrated a preference for state-controlled digital currency by successfully completing a Proof of Concept for a 'Digital Kina' central bank digital currency (CBDC) using blockchain technology, indicating a path toward digital finance that explicitly sidelines private cryptocurrencies.
Summary Points
I. Regulatory Status
- Gray-Zone: The regulatory environment is characterized by conflicting stances from different authorities and significant practical restrictions, creating legal uncertainty.
- Regulatory Conflict: A clear divergence exists between the securities regulator claiming oversight and the central bank disavowing regulation of cryptocurrencies as currency.
- Banking Blockade: Major financial institutions actively prohibit cryptocurrency-related transactions, creating a severe operational barrier.
II. Key Regulatory Bodies
- Securities Commission of Papua New Guinea (SCPNG): Claims jurisdiction over crypto assets, interpreting them as tradeable financial products or 'capital market products' under its mandate.
- Bank of Papua New Guinea (BPNG): The central bank issues public warnings that crypto is not legal tender and is not regulated by it; operates a Regulatory Sandbox and has piloted a CBDC.
- Banking Sector (e.g., Bank South Pacific - BSP): Enforces de facto bans on crypto transactions through internal policies, citing risk management and compliance concerns.
III. Important Legislation
- Capital Markets Act 2015 (No. 22 of 2015): Enacted on October 1, 2015. The primary legislation governing securities. The SCPNG explicitly states that crypto assets fall under the provisions of this Act as tradeable financial products.
- Securities Commission Act 2015 (No. 21 of 2015): Enacted on October 1, 2015. Establishes the SCPNG and grants it the authority to regulate capital markets and issue directives on new financial products, including digital assets.
- BPNG Public Notice on Cryptocurrencies: A standing warning issued in 2018, advising the public that cryptocurrencies are not legal tender, are unregulated by the BPNG, and carry high investment risks.
IV. Compliance Requirements
- AML/CFT & KYC: Financial institutions apply strict anti-money laundering and know-your-customer checks. In practice, these requirements are used to exclude cryptocurrency businesses due to perceived 'pseudonymous' transaction risks.
- Potential Securities Licensing: In theory, if the SCPNG's interpretation is enforced, cryptocurrency exchanges may need to seek licensing under the Capital Markets Act 2015, though no active regime for retail crypto exchanges is currently populated.
V. Notable Restrictions or Limitations
- Explicit Banking Prohibitions: The largest bank, Bank South Pacific (BSP), prohibits the use of its Visa cards and accounts for cryptocurrency transactions, citing an inability to verify transaction data and AML/CFT risks.
- Lack of Legal Tender Status: Cryptocurrencies are not legal tender in Papua New Guinea, as explicitly stated by the BPNG.
- Hostile Compliance Environment: The prevalence of scams and Ponzi schemes masquerading as crypto investments has led regulators to issue frequent warnings, creating a cautious and restrictive atmosphere for legitimate operators.
VI. Recent Developments or Notes
- CBDC Pilot: The Bank of Papua New Guinea has successfully completed a Proof of Concept for a 'Digital Kina' central bank digital currency (CBDC) using blockchain technology (Soramitsu/Hyperledger Iroha), indicating a strategic preference for a state-backed digital currency over private cryptocurrencies.
- Regulatory Sandbox: The BPNG operates a Regulatory Sandbox, which could theoretically be a pathway for fintech innovation, though its application to private crypto assets remains unclear given the bank's public warnings.
- Source Note: References to future dates (e.g., 2025) in some external context are considered projections; the core regulatory facts are based on historical and official sources from 2015, 2018, and 2022.
Full Analysis Report
Full Analysis Report
The regulatory status of cryptocurrency in Papua New Guinea is best classified as a 'Gray-Zone' due to the disconnect between legislative provisions and practical enforcement, compounded by a restrictive banking environment. While the Securities Commission of Papua New Guinea (SCPNG) has formally identified 'crypto assets' as financial products under the Capital Markets Act 2015, this has not translated into a functioning licensing regime for retail Virtual Asset Service Providers (VASPs). Consequently, no locally licensed exchanges exist, and the sector operates without clear operational guidelines for retail trading.
The Bank of Papua New Guinea (BPNG) maintains a cautious distance, repeatedly issuing public notices that cryptocurrencies are not legal tender and are not regulated by the Central Bank. This stance is driven by concerns over financial stability and consumer protection. Despite this 'hands-off' approach to regulation, the BPNG has been proactive in exploring blockchain technology for state use, launching a Regulatory Sandbox in 2019 and completing a Central Bank Digital Currency (CBDC) Proof of Concept for a 'Digital Kina' in partnership with Soramitsu and the Japanese Ministry of Economy, Trade and Industry in 2025.
Operationally, retail traders face significant hurdles. The country's largest financial institution, Bank South Pacific (BSP), has instated a policy blocking the use of its Visa cards for cryptocurrency transactions. The bank's CEO has publicly stated that the pseudonymous nature of crypto transactions prevents the bank from performing necessary AML/CFT checks, leading to a refusal of service for crypto-related activities. This effective 'banking ban' forces users to rely on peer-to-peer (P2P) markets or foreign payment processors, pushing activity into the shadows.
The SCPNG's inclusion of crypto assets in its mandate suggests a potential path toward 'Allowed-Regulated' status in the future, but currently, its enforcement focus is primarily on combating fraudulent schemes. The Commission actively warns against 'fake cryptocurrency platforms' and Ponzi schemes, which are prevalent in the region. Until the SCPNG issues specific licenses to legitimate exchanges and the BPNG softens its stance to allow banking access, the environment remains restrictive and legally ambiguous for the average investor.
The regulatory status of cryptocurrency in Papua New Guinea is best classified as a 'Gray-Zone' due to the disconnect between legislative provisions and practical enforcement, compounded by a restrictive banking environment. While the Securities Commission of Papua New Guinea (SCPNG) has formally identified 'crypto assets' as financial products under the *Capital Markets Act 2015*, this has not translated into a functioning licensing regime for retail Virtual Asset Service Providers (VASPs). Consequently, no locally licensed exchanges exist, and the sector operates without clear operational guidelines for retail trading. The Bank of Papua New Guinea (BPNG) maintains a cautious distance, repeatedly issuing public notices that cryptocurrencies are not legal tender and are not regulated by the Central Bank. This stance is driven by concerns over financial stability and consumer protection. Despite this 'hands-off' approach to regulation, the BPNG has been proactive in exploring blockchain technology for state use, launching a Regulatory Sandbox in 2019 and completing a Central Bank Digital Currency (CBDC) Proof of Concept for a 'Digital Kina' in partnership with Soramitsu and the Japanese Ministry of Economy, Trade and Industry in 2025. Operationally, retail traders face significant hurdles. The country's largest financial institution, Bank South Pacific (BSP), has instated a policy blocking the use of its Visa cards for cryptocurrency transactions. The bank's CEO has publicly stated that the pseudonymous nature of crypto transactions prevents the bank from performing necessary AML/CFT checks, leading to a refusal of service for crypto-related activities. This effective 'banking ban' forces users to rely on peer-to-peer (P2P) markets or foreign payment processors, pushing activity into the shadows. The SCPNG's inclusion of crypto assets in its mandate suggests a potential path toward 'Allowed-Regulated' status in the future, but currently, its enforcement focus is primarily on combating fraudulent schemes. The Commission actively warns against 'fake cryptocurrency platforms' and Ponzi schemes, which are prevalent in the region. Until the SCPNG issues specific licenses to legitimate exchanges and the BPNG softens its stance to allow banking access, the environment remains restrictive and legally ambiguous for the average investor.
Source Evidence
Primary and secondary sources cited in this analysis
"The Capital Market Act (CMA) 2015 gives provisions for a variety of tradeable financial products or instruments, in the likes of... crypto assets and others."
"BSP Visa cardholders are unable to perform transactions using their BSP issued VISA card for cryptocurrency-type transactions."
"He outlined the growing threat of scams such as Ponzi and Pyramid schemes, fake cryptocurrency platforms..."
"The Bank of Papua New Guinea... marked the successful completion of the Digital Kina Proof of Concept (PoC)..."
"As of 2025, cryptocurrency remains in a legal gray area in Papua New Guinea (PNG)."
Web Sources (1)
Sources discovered via web search grounding
Search queries used (10)
- Bank of Papua New Guinea cryptocurrency regulation status
- Papua New Guinea crypto tax laws
- is bitcoin legal in Papua New Guinea
- Papua New Guinea Securities Commission crypto rules
- BPNG regulatory sandbox cryptocurrency
- Papua New Guinea crypto tax capital gains
- Bank South Pacific crypto policy
- "Blockchain Pasifik" Papua New Guinea regulation
- "Securities Commission of Papua New Guinea" cryptocurrency regulation
- Bank of Papua New Guinea circular "cryptocurrency" banks
https://www.scpng.gov.pg/capital-market-products/