Financial Crime World

Nicaragua Moves to Strengthen Banking Regulations Compliance with New Payment Services Regulation

The Central Bank of Nicaragua (BCN) has issued a new regulation aimed at reinforcing the legal framework that regulates payment systems in the country, promoting financial innovation and development of the financial services market.

Key Features of the Regulation

  • Introduces virtual currency as a representation of value registered electronically that is not issued by a central bank or public authority.
  • Broadens the concept of electronic money to include monetary value stored on mobile devices or prepaid cards.
  • Allows for the sale and exchange of currencies electronically through currency market platforms.

Requirements for Financial Technology Providers

To obtain a license from the BCN, financial technology providers of payment services must:

  • Incorporate in Nicaragua as a legal entity
  • Register with the bank
  • Submit an application in accordance with the bank’s format
  • Provide certification of public deeds
  • Shareholders’ information
  • Audited financial statements

The BCN will review applications within 30 business days and may verify compliance through necessary means. The license will be valid indefinitely and can be assigned, sold, or transferred with prior authorization from the bank.

Obligations for Financial Technology Providers

Financial technology providers of payment services must:

  • Ensure availability and immediate reimbursement of funds
  • Maintain security of transactions
  • Provide access to information for clients

Failure to comply with these obligations may result in fines ranging from 2,000 to 5,000 units of fine, corrective measures, or suspension or revocation of the license.

Implementation Timeline

Entities providing regulated services have a period of 180 calendar days to start the registration process and obtain the respective operating license.

Expected Outcomes

The new regulation is expected to promote financial innovation and development in Nicaragua, while ensuring compliance with banking regulations and protecting consumers’ interests.