Stablecoin issuer / redeemer in Brunei

E-money/Payment Tokens: This is the most probable classification for stablecoins that are pegged to fiat currency (like the Brunei Dollar or USD) and are intended to be used for payments. If they meet the definition of "electronic money" or facilitate "payment services" under Brunei's payment systems legislation, they would fall into this category.

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.

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:

One-to-one backing: Maintaining reserves equivalent to the value of stablecoins issued.

Segregation of funds: Keeping customer funds separate from operational funds.

Permitted investments: Restrictions on how reserves can be invested (e.g., in low-risk, highly liquid assets).

Evidence fact bn.stablecoin.if-classified-as-e-moneypayment-tokens-1 not found (may have been renamed).

Business model and operational soundness.

Financial resources and capital adequacy.

Governance and risk management frameworks.

Compliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) requirements.

Evidence fact bn.stablecoin.if-classified-as-e-moneypayment-tokens-2 not found (may have been renamed).

Regardless of classification, any entity involved in issuing, exchanging, or transferring stablecoins would be subject to Brunei's comprehensive AML/CFT framework.

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.

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.

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

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

Pre-application discussions: With AMBD to understand requirements and feasibility.

Submission of detailed business plan: Including operational model, risk management, governance, IT systems, and financial projections.

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.

Anti-Money Laundering and Counter-Terrorism Financing Order, 2011 (AMLO 2011): This is the foundational law that establishes the AML/CFT framework in Brunei. It defines reporting institutions, sets out obligations, and empowers AMBD as the supervisory authority.

AMBD AML/CFT Guidelines for Financial Institutions: While often general, AMBD has clarified that these guidelines, issued under the AMLO 2011, apply to VASPs. These guidelines provide detailed instructions on implementing the requirements of the AMLO 2011.

AMBD's Statement/Circulars on Virtual Assets: AMBD has issued public statements (e.g., "Statement on Virtual Assets") clarifying that virtual asset activities and VASPs fall within the scope of regulated financial activities for AML/CFT purposes. These statements emphasize compliance with the AMLO 2011 and FATF Recommendations, specifically Recommendation 15 concerning virtual assets.

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.

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.

Reporting Body: Reports must be submitted to the Brunei Financial Intelligence Unit (FIU), which operates within AMBD.

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.

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.

Implement robust internal AML/CFT policies, procedures, and controls.

Appoint a qualified Money Laundering Reporting Officer (MLRO).

Provide ongoing AML/CFT training to relevant employees.

Conduct independent audits of their AML/CFT programs.