Tonga
Retail_Trading_Status
Status Changed
Previous status: Gray-Zone
Reconciled from live analysis after human review confirmed status as Allowed-UnRegulated. The original 'Latest Analysis' incorrectly classified the environment as a 'Gray-Zone.' However, the factual information from that analysis—specifically the de facto ban on licensed local intermediaries via the NRBT's non-issuance of licenses, the reported NAMLC VASP ban, and the detailed consumer warnings—was incorporated as it supports the 'Unregulated' aspect of the correct status. The Live Analysis remains the source of truth for the overall status, which accurately reflects that individual trading is not prohibited ('Allowed') but occurs without a specific regulatory framework ('Unregulated').
- Analysis ID
- #871
- Version
- Latest
- Created
- 2025-12-13 07:29
- Run
- d92133e8...
- History
- View all versions
- Workflow Stage
- Reconciled
Executive Summary
As of late 2025, Tonga's retail crypto trading environment remains 'Allowed-Unregulated.' Individuals are permitted to buy, sell, and hold cryptocurrencies, primarily through offshore platforms, but there are no specific laws governing these activities, leaving participants without formal consumer protections. The National Reserve Bank of Tonga (NRBT) has consistently stated that cryptocurrency is not legal tender and has not issued any licenses to local crypto-asset service providers, creating a de facto barrier to establishing regulated local exchanges. Tonga is actively strengthening its broader Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, and its National Anti-Money Laundering Committee (NAMLC) has reportedly reaffirmed a ban on Virtual Asset Service Providers (VASPs). A significant development in December 2025 was the launch of a FinTech Regulatory Sandbox Framework, signaling preparatory steps toward future digital finance oversight, though no crypto-specific regulations have been introduced.
Key Pillars
- Lack of Crypto-Specific Laws: There are no formal laws or guidelines specifically tailored to the issuance, trading, or use of cryptocurrencies.
- De Facto Ban on Local Intermediaries: The NRBT requires a license for any entity offering crypto-asset services but has not issued any such licenses, effectively preventing the establishment of licensed local crypto exchanges or custodians.
- AML/CFT Framework Development: Tonga is actively working to enhance its broader AML/CFT framework. The National Reserve Bank of Tonga (NRBT) acts as the Transaction Reporting Authority (TRA) and Financial Intelligence Unit (FIU) under the Money Laundering and Proceeds of Crime Act (MLPCA). Reports indicate the National Anti-Money Laundering Committee (NAMLC) has reaffirmed a ban on VASPs to mitigate financial crime risks.
- Regulatory Sandbox Initiative: In December 2025, the NRBT launched its FinTech Regulatory Sandbox Framework. This allows for the testing of innovative financial products in a controlled environment and could provide a pathway for future crypto-related innovations under supervision.
- Consumer Risk Warnings: The NRBT consistently warns the public that crypto investments are made at one's own risk, lack legal protections, and that payments are irreversible.
Landmark Laws
Money Laundering and Proceeds of Crime Act (MLPCA)
- Authority: National Reserve Bank of Tonga (NRBT) as the Transaction Reporting Authority (TRA) / Financial Intelligence Unit (FIU).
- Summary: This Act forms the basis of Tonga's AML/CFT legislative framework, mandating customer due diligence, suspicious transaction reporting, and record-keeping. While not explicitly mentioning crypto, it provides the existing framework that would apply to financial service providers.
National Reserve Bank of Tonga Act (Section 4A(k))
- Date: 1989-07-01
- Authority: National Reserve Bank of Tonga (NRBT)
- Summary: Grants the NRBT authority to regulate and supervise non-bank financial institutions. The NRBT uses this authority to state that any entity offering crypto-asset services requires a license.
- Source: https://www.reservebank.to/
Foreign Exchange Control Act
- Date: 2018-11-01
- Authority: National Reserve Bank of Tonga (NRBT)
- Summary: Regulates the movement of foreign exchange and gold. While not explicitly naming crypto, it empowers the NRBT to control foreign reserves, and the bank has stated its reserves cannot be invested in volatile crypto assets.
- Source: https://ago.gov.to/cms/images/leylaws/Foreign_Exchange_Control_Act_2018.pdf
NRBT Public Notice on Cryptocurrency
- Date: 2021-06-15
- Authority: National Reserve Bank of Tonga (NRBT)
- Summary: A press release explicitly stating cryptocurrency is not legal tender, warning against its volatility, and clarifying that no business licenses have been issued for crypto activities.
- Source: https://www.reservebank.to/
Considerations
- Asset Classification: There is no formal classification of crypto assets. The NRBT has stated that cryptocurrency is not legal tender.
- Tax Implications: Tonga does not have specific tax laws for cryptocurrencies. The country has a 15% Goods and Services Tax (GST) and a 0% capital gains tax. Occasional crypto gains might not be explicitly taxed, but high-volume trading could potentially be viewed as business income.
- Consumer Protection: As the market is unregulated, there are no formal consumer protections. The NRBT warns that cryptocurrency payments have no legal protections and that the bank cannot help recover funds.
- Offshore Platforms: Residents access major international exchanges, as there are no licensed, Tonga-based crypto exchanges.
- Banking Restrictions: Local banks are advised against processing crypto transactions, and the Foreign Exchange Control Act may complicate individual wire transfers to foreign crypto exchanges.
- Scam Prevalence: The NRBT frequently issues specific warnings about crypto investment scams targeting Tongans.
Notes
- FATF/APG Engagement: Tonga is a member of the Asia/Pacific Group on Money Laundering (APG) and is actively working to strengthen its AML/CFT system, undergoing mutual evaluations.
- FinTech Regulatory Sandbox: The NRBT launched its FinTech Regulatory Sandbox Framework on June 3, 2025, providing a controlled environment for testing innovative digital financial solutions, which could include crypto-related innovations in the future.
- CBDC Exploration: The adoption of a Central Bank Digital Currency (CBDC) is under exploration by the NRBT.
- Historical Proposals: A high-profile proposal to make Bitcoin legal tender, advocated by Lord Fusitu'a around 2021-2022, failed to materialize and is not current government policy.
- VASP Ban: Secondary sources report that Tonga's National Anti-Money Laundering Committee (NAMLC) reaffirmed a ban on Virtual Asset Service Providers (VASPs) in 2025, aligning with a cautious regional approach to unregulated crypto assets.
Remaining Uncertainties
- The exact text and legal basis of the National Anti-Money Laundering Committee (NAMLC) 'ban' on VASPs, referenced in secondary sources, is not available online as a primary document.
- Whether the Foreign Exchange Control Act 2018 is actively used by authorities or banks to block individual wire transfers to foreign crypto exchanges.
Detailed Explanation
Detailed Explanation
As of late 2025, Tonga's regulatory stance on cryptocurrency for retail trading is 'Allowed-Unregulated.' This means individuals are permitted to buy, sell, and hold digital assets, but they do so entirely at their own risk and without the benefit of any formal legal or consumer protection frameworks. The National Reserve Bank of Tonga (NRBT) has been unequivocal in its public communications, stating in a June 2021 notice that cryptocurrency is not legal tender and that no business licenses have been issued for crypto-related activities. Consequently, residents primarily access the market through offshore platforms, as there are no licensed, locally-based crypto exchanges or custodians. The NRBT leverages its authority under the National Reserve Bank of Tonga Act, specifically Section 4A(k), to assert that any entity offering crypto-asset services requires a license, a requirement it has not fulfilled, creating a de facto ban on regulated local intermediaries. This unregulated environment is compounded by banking restrictions, where local banks are advised against processing crypto transactions, and the Foreign Exchange Control Act of 2018 may complicate international wire transfers to foreign exchanges. The NRBT consistently warns the public about the volatility of crypto assets, the irreversibility of payments, and the prevalence of investment scams, emphasizing that it cannot assist in recovering lost funds. Tonga's broader regulatory focus is on strengthening its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework. The foundational Money Laundering and Proceeds of Crime Act (MLPCA) establishes the NRBT as the Transaction Reporting Authority and Financial Intelligence Unit. Reports indicate that the National Anti-Money Laundering Committee (NAMLC) has reaffirmed a ban on Virtual Asset Service Providers (VASPs) to mitigate financial crime risks, aligning with a cautious regional approach. A significant forward-looking development occurred in December 2025 with the launch of the NRBT's FinTech Regulatory Sandbox Framework. This initiative signals preparatory steps toward future digital finance oversight by allowing innovative financial products to be tested in a controlled environment, potentially providing a pathway for crypto-related innovations under supervision in the future, though no specific crypto regulations have been introduced. Tax treatment remains ambiguous with no specific laws, though the general 0% capital gains tax may apply, and high-volume trading could be viewed as business income. Tonga's engagement with the Asia/Pacific Group on Money Laundering (APG) and its exploration of a Central Bank Digital Currency (CBDC) further illustrate its active, albeit cautious, monitoring of the digital asset space.
Summary Points
I. Regulatory Status
* Status is Allowed-Unregulated for retail trading as of late 2025.
* Individuals can buy, sell, and hold crypto, but there are no specific laws or consumer protections.
* The National Reserve Bank of Tonga (NRBT) states crypto is not legal tender.
* There is a de facto ban on licensed local intermediaries; the NRBT requires a license for crypto service providers but has not issued any.
II. Key Regulatory Bodies
* National Reserve Bank of Tonga (NRBT): The central bank and primary financial regulator. It acts as the Transaction Reporting Authority (TRA) and Financial Intelligence Unit (FIU) under the Money Laundering and Proceeds of Crime Act (MLPCA). It issues public warnings, manages the FinTech sandbox, and asserts licensing authority over crypto services.
* National Anti-Money Laundering Committee (NAMLC): Reported to have reaffirmed a ban on Virtual Asset Service Providers (VASPs) in 2025 to mitigate financial crime risks.
III. Important Legislation
* Money Laundering and Proceeds of Crime Act (MLPCA): The core AML/CFT law, mandating customer due diligence and reporting. It provides the existing framework that would apply to financial service providers, though it does not explicitly mention crypto.
* National Reserve Bank of Tonga Act (Section 4A(k)) (1989-07-01): Grants the NRBT authority to regulate non-bank financial institutions. The NRBT uses this to state that any entity offering crypto-asset services requires a license.
* Foreign Exchange Control Act (2018-11-01): Regulates movement of foreign exchange and gold. The NRBT has stated its reserves cannot be invested in volatile crypto assets, and the act may complicate individual wire transfers to offshore exchanges.
* NRBT Public Notice on Cryptocurrency (2021-06-15): A key press release explicitly warning the public that crypto is not legal tender, is highly volatile, and that no business licenses have been issued for crypto activities.
IV. Compliance Requirements
* For entities: A license from the NRBT is formally required to operate as a crypto-asset service provider, but none have been issued.
* The broader AML/CFT obligations under the MLPCA (customer due diligence, suspicious transaction reporting, record-keeping) would apply to any licensed financial service provider.
V. Notable Restrictions or Limitations
* No licensed local crypto exchanges or custodians exist due to the NRBT's non-issuance of licenses.
* Local banks are advised against processing crypto transactions.
* The Foreign Exchange Control Act may restrict or complicate individual wire transfers to foreign crypto exchanges.
* The NAMLC has reportedly reaffirmed a ban on Virtual Asset Service Providers (VASPs).
* There are no formal consumer protections; the NRBT warns that payments are irreversible and it cannot help recover lost funds.
* High prevalence of crypto investment scams targeting Tongans, as frequently warned by the NRBT.
VI. Recent Developments or Notes
* FinTech Regulatory Sandbox Framework: Launched by the NRBT on June 3, 2025. It allows testing of innovative digital financial solutions in a controlled environment and could be a pathway for future crypto-related innovations under supervision.
* CBDC Exploration: The NRBT is exploring the adoption of a Central Bank Digital Currency (CBDC).
* FATF/APG Engagement: Tonga is a member of the Asia/Pacific Group on Money Laundering (APG) and is actively working to strengthen its AML/CFT system.
* Tax Implications: No specific crypto tax laws exist. Tonga has a 15% Goods and Services Tax (GST) and a 0% capital gains tax. High-volume trading could potentially be viewed as business income.
* Historical Context: A high-profile proposal to make Bitcoin legal tender (circa 2021-2022) failed to materialize and is not current government policy.
Full Analysis Report
Full Analysis Report
Retail_Trading_Status in Tonga
Report Date: 2025-12-10
Topic: Retail_Trading_Status
Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity.
Identified Status: Allowed-UnRegulated
Narrative Explanation:
Retail cryptocurrency trading by individuals in Tonga is legally permitted but operates in a completely unregulated environment. There is no law criminalizing the personal buying, selling, or holding of cryptocurrencies like Bitcoin. However, the National Reserve Bank of Tonga (NRBT) has established a regulatory position that effectively prevents the development of a formal, local market for crypto services.
The cornerstone of this position is the NRBT's repeated public clarification that cryptocurrency is not legal tender in Tonga (NRBT Press Release, 2021-06-15; RNZ News, 2021-06-16). Furthermore, the bank states that under the National Reserve Bank of Tonga Act, any entity offering investments or services in crypto-assets must obtain a license. Critically, the NRBT confirms that it has not issued any such business licenses. This creates a de facto ban on licensed local crypto exchanges, custodians, or other Virtual Asset Service Providers (VASPs). This stance was reportedly reinforced in 2025 by the National Anti-Money Laundering Committee (NAMLC), which reaffirmed a ban on VASPs to address financial crime risks (KuCoin, 2025-09-23).
Consequently, Tongan residents who wish to trade cryptocurrencies must use international, offshore platforms. They do so entirely at their own risk, as emphasized by frequent NRBT warnings highlighting the volatility of crypto assets, the irreversibility of payments, and the total lack of legal protection or recourse for consumers (NRBT Warning Notice, 2025-12-02). The Foreign Exchange Control Act 2018 may also pose practical hurdles for transferring funds to these foreign platforms.
Despite this restrictive approach to business operations, the Tongan government is not inert on digital finance. The NRBT launched a FinTech Regulatory Sandbox Framework in December 2025, designed to allow supervised testing of innovative financial products and services. While not specific to crypto, this sandbox represents a significant preparatory step toward future oversight of digital assets. Tonga also continues to engage with international bodies like the FATF and APG to strengthen its broader Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework under the Money Laundering and Proceeds of Crime Act (MLPCA).
In conclusion, the status is 'Allowed' because individuals face no legal prohibition on trading. It is 'Unregulated' because there is no specific legal framework governing crypto activities, no licensed local service providers, and no consumer safeguards. Regulatory actions are focused on warning the public, blocking local business formation, and developing foundational financial integrity systems, while exploring future possibilities through the fintech sandbox.
Relevant Text Excerpts and Sources:
* NRBT Public Notice (2021-06-15): "The National Reserve Bank of Tonga warns the general public that NO business license has been issued to a business in Tonga to offer crypto-assets, such as Bitcoin."
* RNZ News (2021-06-16): "Cryptocurrency is not legal tender in Tonga... no licence had been issued."
* NRBT Warning Notice (2025-12-02): "Cryptocurrency payments have no legal protections. The National Reserve Bank cannot step in to help you get your money back."
* KuCoin News (2025-09-23): "Tonga's National Anti-Money Laundering Committee (NAMLC) has reaffirmed a ban on virtual asset service providers (VASPs) in the country."
* UPay Blog (2024-12-08): "Adoption status: Yes, cryptocurrency is legal in Tonga, but it is not considered legal tender."
* Carlos Maiz (2025-05-25): "Cryptocurrency ownership and trading are legal. No formal crypto regulations currently in place."
* IMF Fintech Note (2021-10-14): References the broader context of AML/CFT and virtual assets.
* Atlantic Council CBDC Tracker: Notes Tonga's exploration of a Central Bank Digital Currency.
## Retail_Trading_Status in Tonga **Report Date:** 2025-12-10 **Topic:** Retail_Trading_Status **Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity. --- **Identified Status:** Allowed-UnRegulated **Narrative Explanation:** Retail cryptocurrency trading by individuals in Tonga is legally permitted but operates in a completely unregulated environment. There is no law criminalizing the personal buying, selling, or holding of cryptocurrencies like Bitcoin. However, the National Reserve Bank of Tonga (NRBT) has established a regulatory position that effectively prevents the development of a formal, local market for crypto services. The cornerstone of this position is the NRBT's repeated public clarification that cryptocurrency is not legal tender in Tonga (NRBT Press Release, 2021-06-15; RNZ News, 2021-06-16). Furthermore, the bank states that under the National Reserve Bank of Tonga Act, any entity offering investments or services in crypto-assets must obtain a license. Critically, the NRBT confirms that it has not issued any such business licenses. This creates a de facto ban on licensed local crypto exchanges, custodians, or other Virtual Asset Service Providers (VASPs). This stance was reportedly reinforced in 2025 by the National Anti-Money Laundering Committee (NAMLC), which reaffirmed a ban on VASPs to address financial crime risks (KuCoin, 2025-09-23). Consequently, Tongan residents who wish to trade cryptocurrencies must use international, offshore platforms. They do so entirely at their own risk, as emphasized by frequent NRBT warnings highlighting the volatility of crypto assets, the irreversibility of payments, and the total lack of legal protection or recourse for consumers (NRBT Warning Notice, 2025-12-02). The Foreign Exchange Control Act 2018 may also pose practical hurdles for transferring funds to these foreign platforms. Despite this restrictive approach to business operations, the Tongan government is not inert on digital finance. The NRBT launched a FinTech Regulatory Sandbox Framework in December 2025, designed to allow supervised testing of innovative financial products and services. While not specific to crypto, this sandbox represents a significant preparatory step toward future oversight of digital assets. Tonga also continues to engage with international bodies like the FATF and APG to strengthen its broader Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework under the Money Laundering and Proceeds of Crime Act (MLPCA). In conclusion, the status is 'Allowed' because individuals face no legal prohibition on trading. It is 'Unregulated' because there is no specific legal framework governing crypto activities, no licensed local service providers, and no consumer safeguards. Regulatory actions are focused on warning the public, blocking local business formation, and developing foundational financial integrity systems, while exploring future possibilities through the fintech sandbox. **Relevant Text Excerpts and Sources:** * NRBT Public Notice (2021-06-15): "The National Reserve Bank of Tonga warns the general public that NO business license has been issued to a business in Tonga to offer crypto-assets, such as Bitcoin." * RNZ News (2021-06-16): "Cryptocurrency is not legal tender in Tonga... no licence had been issued." * NRBT Warning Notice (2025-12-02): "Cryptocurrency payments have no legal protections. The National Reserve Bank cannot step in to help you get your money back." * KuCoin News (2025-09-23): "Tonga's National Anti-Money Laundering Committee (NAMLC) has reaffirmed a ban on virtual asset service providers (VASPs) in the country." * UPay Blog (2024-12-08): "Adoption status: Yes, cryptocurrency is legal in Tonga, but it is not considered legal tender." * Carlos Maiz (2025-05-25): "Cryptocurrency ownership and trading are legal. No formal crypto regulations currently in place." * IMF Fintech Note (2021-10-14): References the broader context of AML/CFT and virtual assets. * Atlantic Council CBDC Tracker: Notes Tonga's exploration of a Central Bank Digital Currency.
Source Evidence
Primary and secondary sources cited in this analysis
"The National Reserve Bank of Tonga warns the general public that NO business license has been issued to a business in Tonga to offer crypto-assets, such as Bitcoin."
"Cryptocurrency is not legal tender in Tonga... The release said anyone who offered investments in crypto-assets such as bitcoin in Tonga would need a licence, and no licence had been issued."
"Cryptocurrency payments have no legal protections. The National Reserve Bank cannot step in to help you get your money back."
"Tonga's National Anti-Money Laundering Committee (NAMLC) has reaffirmed a ban on virtual asset service providers (VASPs) in the country."
"Tonga currently does not have a formal licensing regime specifically for Virtual Asset Service Providers (VASPs)... entities offering exchange... must register... though none have been issued."
"Adoption status: Yes, cryptocurrency is legal in Tonga, but it is not considered legal tender."
"Cryptocurrency ownership and trading are legal. No formal crypto regulations currently in place."
"Summary of APG Mutual Evaluation Report for Tonga."
"Discusses the application of AML/CFT to virtual assets."
Web Sources (5)
Sources discovered via web search grounding
Search queries used (9)
- Lord Fusitu'a Tonga Bitcoin adoption status
- National Reserve Bank of Tonga warning on cryptocurrency
- Tonga Bitcoin legal tender bill passed or failed
- Tonga crypto trading legality 2024
- National Reserve Bank of Tonga cryptocurrency regulation status
- Tonga National Anti-Money Laundering Committee crypto ban VASP
- "BG Wealth Sharing" Tonga warning
- "National Reserve Bank of Tonga" crypto license issued
- Tonga Foreign Exchange Control Act cryptocurrency
https://www.reservebank.to/index.php/news/general-public-awareness-on-legal-tender-external-reserves-and-investment-on-bitcoin
https://behindmlm.com/mlm-reviews/dreamtrips-review-v2-who-is-verona-international-holdings/
https://www.reservebank.to/index.php/news/press-release-cryptocurrency-investment-scam
https://behindmlm.com/companies/qubitlife-collapses-no-withdrawals-ceo-greg-limon-mia/
https://www.rnz.co.nz/international/pacific-news/444846/tongan-reserve-bank-dampens-cryptocurrency-talk