Crypto-funded debit card in Brunei

In Brunei, cryptocurrency is illegal as of 2025, so any exchange facilitating fiat-to-crypto or crypto-to-fiat transactions is conducting an unauthorized, illegal activity rather than a licensed or permissible regulated activity.

No Specific VA Licensing Regime: There is no dedicated law or regulation in Brunei that specifically defines, regulates, or licenses virtual asset service providers (VASPs) for activities like operating crypto exchanges, providing crypto custody, or processing crypto payments.

VAs Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Brunei.

AMBD Warnings: AMBD has consistently warned the public about the risks associated with investing in virtual currencies and participating in Initial Coin Offerings (ICOs), highlighting their speculative nature, volatility, lack of underlying value, and the absence of regulatory protection.

Money-changing and remittance activities involving the exchange or transfer of fiat funds in Brunei must be licensed by the Brunei Darussalam Central Bank (BDCB) under the current regulatory framework; BDCB is the successor to the Autoriti Monetari Brunei Darussalam (AMBD), and licensing is no longer issued under the 2011 Order in AMBD’s name.

Money-Changing and Remittance Businesses Order, 2011: Requiring a license for money services businesses.

Local Presence: Yes, generally, a local physical presence and local management/board members are required for licensed financial institutions in Brunei.

Fit and Proper Test: For directors, shareholders, and key management.

Conservative Approach: Brunei's regulators are generally conservative. Operating in an unregulated space with high risk, without specific guidance from AMBD, carries significant legal and reputational risks.

AML/KYC Requirements: Brunei has robust Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) laws. Any financial institution, or entity performing financial activities, would be subject to strict AML/CFT obligations, including:

Customer Due Diligence (CDD) / Know Your Customer (KYC) procedures.

Suspicious Transaction Reporting (STR) to the Financial Intelligence Unit (FIU) under the AMBD.

Compliance with the Anti-Money Laundering Order, 2000 and the Anti-Terrorism Order, 2011 (and subsequent updates).

Obligation to Report: VASPs are obligated to report any transaction (or attempted transaction) that they know, suspect, or have reasonable grounds to suspect is related to money laundering or terrorist financing.

Identification and Verification (ID&V) of Customers:

Beneficial Ownership: Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of customers, including understanding the ownership and control structure of legal persons and arrangements.

Risk-Based Approach: Applying a risk-based approach to CDD. This means:

Ongoing Monitoring: Regularly monitoring transactions and business relationships to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes keeping customer information up-to-date.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that a STR has been, or will be, made.

Customer Identification Records: Copies of identity documents, verification data, and any information obtained during the CDD process.

Transaction Records: Details of all transactions, including sender and receiver information, virtual asset types, amounts, dates, and transaction identifiers (e.g., blockchain hashes).

Duration: Records must be retained for at least five (5) years after the business relationship ends or after the date of the transaction. This ensures that records are available for audit, investigation, and analysis by competent authorities.

Appoint a qualified Money Laundering Reporting Officer (MLRO).

Provide ongoing AML/CFT training to relevant employees.

Conduct independent audits of their AML/CFT programs.

If classified as E-money/Payment Tokens: The Payment Systems Act, 2022, and its associated regulations/directives would likely impose requirements on issuers to safeguard customer funds. This would typically include:

Legislation: The primary legislation governing electronic money and payment services in Brunei is the Payment Systems Act, 2022. This Act provides the legal framework for the regulation, oversight, and supervision of payment systems and services in Brunei Darussalam.

There are no specific rules in Brunei for algorithmic stablecoins.

Such stablecoins would likely fall outside the regulated e-money framework, existing in an unregulated space, or potentially even be viewed with suspicion by regulators due to their higher risk profile and potential for instability, making issuance or use challenging in the regulated financial system. They might face implicit disincentives or warnings from the BDCB.