Regulatory Updates Boost Financial Sector with Virtual Asset and Digital Banking Law
Cape Verde has recently undergone a major regulatory overhaul aimed at fostering the growth of its financial sector through the establishment of digital banks and the provision of services with virtual assets.
New Law: A Major Step Towards Digitalization
Law 30/X/2023, published in the Official Bulletin on June 21, 2023, came into force just a day later. This new law follows recent global trends in regulating virtual assets, which are defined as any digital representation of value that is not tied to a legally established currency and can be transferred, stored, and traded electronically.
Requirements for Virtual Asset Services
Under the new regulations, entities seeking to offer services with virtual assets in Cape Verde must register with Banco de Cabo Verde and comply with duties aimed at preventing money laundering and terrorism financing. These requirements include:
- Prior registration with the central bank is now mandatory for professional entities intending to operate in the national territory.
- Digital banks providing mostly retail banking services through online channels will be subject to the same requirements as traditional banks, including:
- Authorization from the regulatory authority
- Capital requirements
- Risk management
- Controls
- Other legal obligations
Market Access Conditions and Adjustments
Banco de Cabo Verde reserves the right to establish specific market access conditions for digital banks and adjust certain requirements based on risk assessments.
Impact on Cape Verde’s Financial System
The new law marks a significant step towards the digitalization of Cape Verde’s financial system, poised to attract foreign investment and drive economic growth in the region. The regulatory overhaul is expected to boost the country’s financial sector, making it more attractive for businesses and individuals alike.
Overall, Law 30/X/2023 represents a major milestone in Cape Verde’s efforts to modernize its financial landscape and stay competitive in an increasingly digital world.