Financial Crime World

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Nicaragua’s Regulatory Landscape: A Guide to Different Modalities

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As Nicaragua continues to evolve its financial landscape, it is essential for stakeholders to understand the regulatory framework governing various modalities, from traditional securities to fintech innovations. In this article, we will delve into the regulations surrounding blockchain, open banking, fraud, and more.

Blockchain Regulation

While there is no specific regulation on blockchain in Nicaragua, the Central Bank’s Fintech Regulation does cover services that require its use. This includes:

  • Exchange between virtual assets and fiat currencies
  • Transfer of virtual assets
  • Custody and administration of virtual assets
  • Participation in financial services related to an issuer’s offering or sale of a virtual asset

Open Banking

Open banking has yet to be regulated in Nicaragua, leaving concerns about bank secrecy principles unaddressed. However, once this type of service is allowed, financial institutions will need to comply with specific regulations.

Fraud Regulation

The main element of fraud in Nicaragua is deception, which can lead to misrepresentation, falsification, and other crimes. Regulators are focused on protecting user identification by safeguarding personal data.

Fintech and Securities Regulation

In Nicaragua, fintech companies must register with the Superintendencia de Bancos y Seguros (SIBAN) and comply with existing banking regulations. Additionally, securities laws apply to digital assets and virtual currencies.

Blockchain Assets and Trading Platforms

There is no specific regulation on blockchain asset trading platforms in Nicaragua. However, the Fintech Regulation does cover services related to an issuer’s offering or sale of a virtual asset.

Virtual Currencies

In Nicaragua, virtual currencies and blockchain assets are treated equally, with no alternative classification for blockchain assets.

DeFi Platforms

There is no specific regulation on DeFi platforms in Nicaragua. However, fintech companies must comply with existing regulations governing financial services.

Non-Fungible Tokens (NFTs)

As there is no specific regulation on the different types of blockchain assets in Nicaragua, NFTs do not have a specific regulatory framework.

Conclusion

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While Nicaragua’s regulatory landscape for fintech and securities is still developing, it is essential to understand the existing regulations surrounding blockchain, open banking, fraud, and more. As the industry continues to evolve, stakeholders can expect changes and updates to the regulatory framework in the coming years.

About the Authors

Consortium Legal is a specialized law firm practicing across five countries in Central America, providing high-level technical excellence for clients. The firm’s fintech practice consists of lawyers with skills in areas such as:

  • Banking and finance
  • Securities
  • Insurance
  • Regulatory compliance
  • Corporate
  • Taxes
  • Intellectual property
  • Consumer law
  • Privacy and data protection
  • Litigation

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