Kiribati

**Registration, Not Licensing (for Crypto-specific activities):** Kiribati currently operates on a **de facto registration regime** under its AML/CTF laws for virtual asset activities, rather than a specific licensing regime. This means that entities dealing with virtual assets are primarily required to comply with AML/CTF obligations and register with the FIU (if they fall under the definition of an "accountable institution"), rather than obtaining a bespoke crypto-specific license.

**General Business Licensing:** All businesses operating in Kiribati, regardless of their sector, must still undergo general business registration and licensing with the Registrar of Companies and comply with general business laws.

**Kiribati Financial Intelligence Unit (FIU):** Responsible for enforcing the AML/CTF Act, receiving suspicious transaction reports, and providing guidance on AML/CTF compliance.

*Unfortunately, a direct, consistently accessible public website for the Kiribati FIU with specific virtual asset guidance is not readily available online. However, their existence and mandate are confirmed through international AML/CTF bodies and reports.*

**Bank of Kiribati:** The central bank of Kiribati. While not directly regulating VASPs, it has overall oversight of the financial system and could issue directives if virtual asset activities significantly impact financial stability or traditional banking services.

**Bank of Kiribati:** http://bankofkiribati.com/ (While the site exists, detailed regulatory documents for VAs are not typically found here).

**Cryptocurrency Exchanges (VA to FIAT, VA to VA):**

**Current Status:** No specific crypto exchange license.

**Likely Treatment:** Would most likely be considered a "money or value transfer service" or a "virtual asset service provider" (VASP) under the scope of the AML/CTF Act. This would trigger obligations as an "accountable institution."

**Requirements:** Compliance with AML/CTF Act, including registration with the FIU (if applicable), and general business registration.

**Custody Providers (holding virtual assets on behalf of others):**

**Current Status:** No specific license for virtual asset custody.

**Likely Treatment:** If the custody involves transactions that resemble money services or if the assets are considered "funds," they could fall under the AML/CTF Act. Some general financial services legislation might also apply, but this is less clear without specific guidance. As per FATF recommendations, custody providers are VASPs and subject to AML/CTF.

**Requirements:** Compliance with AML/CTF Act, general business registration.

**Payment Processors (dealing with virtual assets):**

**Current Status:** No specific license.

**Likely Treatment:** Very high probability of being classified as "money or value transfer services" under the AML/CTF Act, especially if they facilitate the transfer of value using virtual assets.

**Specific Crypto Capital:** There are **no specific minimum capital requirements** defined for virtual asset service providers in Kiribati.

**General Business Capital:** General business registration may have nominal capital requirements, but nothing substantial for financial services.

**AML/KYC Requirements:** This is the most crucial aspect.

**Mandatory:** Any entity falling under the scope of the AML/CTF Act (including VASPs by interpretation) would be obligated to implement robust AML/KYC procedures.

**Customer Due Diligence (CDD):** Identifying and verifying the identity of customers, including beneficial owners.

**Ongoing Monitoring:** Monitoring business relationships and transactions.

**Record-Keeping:** Maintaining records of transactions and customer data for a specified period.

**Suspicious Transaction Reporting (STR):** Reporting suspicious activities to the Kiribati FIU.

**Risk-Based Approach:** Implementing a risk-based approach to AML/CTF, assessing the risks associated with different customers, products, and geographies.

**Generally Required:** For any business to be officially registered and operate in Kiribati, a legal presence (registered office, local agent/director) is typically required.

**No Crypto-Specific Mandate:** There's no additional specific "local presence" mandate for virtual asset activities beyond general business requirements.

Registering the entity (e.g., company) with the Kiribati Registrar of Companies. This involves submitting incorporation documents, details of directors/shareholders, and a registered office.

Obtaining any necessary general business licenses or permits.

**AML/CTF Compliance & FIU Engagement:**

Determining if the virtual asset activity falls under the definition of an "accountable institution" or a "virtual asset service provider" as interpreted by the Kiribati FIU and the AML/CTF Act.

If so, establishing an internal AML/CTF program, appointing an AML/CTF compliance officer, and potentially registering with the FIU (if required for the specific type of accountable institution).

Preparing to comply with all ongoing AML/CTF obligations (CDD, record-keeping, STR reporting).

**Anti-Money Laundering and Counter-Terrorist Financing Act 2018 (AML/CTF Act 2018):** This Act defines "virtual assets" and "virtual asset service providers" in line with FATF recommendations, thereby bringing them under the scope of AML/CTF obligations.

*While a direct, stable public URL for the Kiribati AML/CTF Act 2018 on a government portal is challenging to find, the Act is published and accessible through legal databases and international AML/CTF organizations. For example, the Asia/Pacific Group on Money Laundering (APG) references it.*

**APG Website:** https://www.apgml.org/ (You would typically search for Kiribati's Mutual Evaluation Report here, which references their laws.)

**Financial Action Task Force (FATF) Recommendations:** Kiribati, like many nations, aims to comply with FATF standards. FATF's Recommendation 15 and its Interpretive Note specifically address virtual assets and VASPs, requiring them to be regulated for AML/CTF purposes. Even without specific local crypto laws, the Kiribati FIU would likely interpret existing AML/CTF laws through the lens of FATF guidance.

**FATF Guidance for a Risk-Based Approach to Virtual Assets and VASPs:** https://www.fatf-gafi.org/media/fatf/documents/recommendations/RBA-VA-VASPS.pdf

**Investment of Money (or assets of value):** Whether value is exchanged for the token.

**In a Common Enterprise:** Whether the token holders' fortunes are linked to the success or failure of the token issuer or a specific project.

**With an Expectation of Profit:** Whether the token holder anticipates financial gains (e.g., appreciation in value, dividends, interest) from their acquisition of the token.

**Solely (or predominantly) from the Efforts of Others:** Whether these profits are derived primarily from the managerial or entrepreneurial efforts of the issuer or a third party, rather than from the token holder's own efforts or consumption of a direct utility.

**Investment Tokens/Security Tokens:** Tokens explicitly designed to represent ownership in an asset (e.g., real estate, company shares), a share of profits, or a debt instrument.

**Initial Coin Offerings (ICOs) or Token Sales:** Where the primary purpose of the token purchase is speculative investment with an expectation of profit based on the development and success of the issuer's project, and the token offers little immediate utility.

**Tokens Representing Equity or Debt:** Any token that functions as a digital representation of a traditional share, bond, or other equity/debt instrument.

**Certain types of Non-Fungible Tokens (NFTs):** If an NFT is sold with the promise of future appreciation based on the efforts of the issuer or a third party (e.g., fractionalized NFTs, NFTs bundled with investment opportunities), rather than purely as a unique collectible or utility item.

**True Utility Tokens:** Tokens that primarily provide access to a specific product or service within a network, and whose value is derived from their use, not speculative investment.

**Payment Tokens:** Cryptocurrencies primarily used as a medium of exchange (e.g., Bitcoin, stablecoins primarily used for payments), without an underlying investment contract.

**Pure Collectible NFTs:** NFTs where the value is solely derived from their artistic or collectible nature, without any explicit or implicit promise of profit from the efforts of others.

**Licensing:** The issuer would likely be required to obtain a license from the **Central Bank of Kiribati (CBK)** to operate as a financial institution or to issue financial products. This could fall under the general licensing provisions of the **Financial Institutions Act 2017**.

**Disclosure:** Issuers might be required to provide prospectus-like disclosure documents to potential investors, outlining the risks, financial details of the project, and the rights associated with the token.

**Ongoing Compliance:** They would be subject to ongoing regulatory oversight, including reporting requirements, anti-money laundering (AML), and counter-financing of terrorism (CFT) obligations as per the **AML/CFT Act 2017** and related regulations.

**Unregulated Trading:** Trading on offshore, unregulated cryptocurrency exchanges would likely fall outside the direct purview of Kiribati's financial regulators, though Kiribati citizens participating might still be subject to local tax or financial reporting requirements.

**Domestic Trading:** Any attempt to establish a domestic platform for secondary trading of security tokens would likely require licensing and regulation by the CBK as an exchange or financial market operator under the relevant financial institutions acts. This would entail stringent operational, capital, and compliance requirements.

**Investor Protection:** Rules regarding market manipulation, insider trading, and investor protection that apply to traditional securities would conceptually extend to security tokens, although enforcement might be challenging without specific digital asset market regulations.

**Nascent Regulatory Framework:** The regulatory framework for digital assets is still developing or non-existent.

**Limited Market Activity:** Kiribati likely has very limited domestic cryptocurrency issuance or significant trading activity that would attract regulatory attention on a securities classification basis.

**Focus on AML/CFT:** Like many small island nations, the primary focus of financial regulation regarding virtual assets tends to be on AML/CFT compliance, often driven by international standards set by FATF.

**Central Bank of Kiribati (CBK) Website:** This is the primary regulatory body. While specific crypto guidance is unlikely, their website is the official source for information regarding financial institutions and legislation.

**Financial Institutions Act 2017:** This is the foundational law for licensing and regulating financial institutions in Kiribati. It would contain the broad definitions of "financial institution," "financial business," "security," and "investment" that the CBK would rely upon.

**None explicitly comprehensive or partial.** There are no specific laws or regulations governing virtual assets, crypto trading, exchanges, or initial coin offerings (ICOs) in Kiribati.

**Default to existing financial and AML/CFT laws.** Any crypto-related activity might be reviewed under existing financial services legislation and AML/CFT laws, which were not specifically designed for virtual assets.

**Role:** As the central bank and monetary authority, the BoK is responsible for regulating financial institutions, maintaining financial stability, and implementing monetary policy. In the absence of specific crypto laws, any crypto activities that mimic traditional banking or financial services might theoretically fall under their purview for supervision or licensing.

**Website:** Information on the Bank of Kiribati is often limited online. Their official presence is not as robust as larger nations' central banks.

**Reference:** Governed by the **Bank of Kiribati Act**.

**Kiribati Financial Intelligence Unit (KFIU):**

**Role:** The KFIU is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other information related to money laundering and terrorist financing. While Kiribati's AML/CFT Act may not explicitly name "virtual assets," the KFIU would be the body to monitor and investigate suspicious activities involving any form of value transfer, including potentially crypto, under the general scope of financial crime.

**Website:** Official KFIU information is often found via regional AML/CFT bodies like the Asia/Pacific Group on Money Laundering (APG). Direct KFIU government website is typically not available or limited.

**Reference:** Operates under the **Anti-Money Laundering and Counter-Terrorist Financing Act 2018**.

**Relevance:** This is the primary legislation for combating money laundering and terrorist financing in Kiribati. While it does not explicitly mention "virtual assets" or "cryptocurrencies" as designated reporting entities or financial products (unlike more modern AML laws in other jurisdictions), it provides the framework under which the KFIU operates. If the FATF (Financial Action Task Force) recommendations regarding virtual assets are to be implemented, this act would likely be the basis for future amendments to include VASPs.

**URL:** A common resource for Kiribati legislation is the Pacific Legal Information Institute (PacLII).

Anti-Money Laundering and Counter-Terrorist Financing Act 2018 (Kiribati) on PacLII

**Bank of Kiribati Act (Consolidated Act):**

**Date:** Various amendments over time, core legislation is older.

**Relevance:** This Act establishes the Bank of Kiribati and outlines its powers and responsibilities over financial institutions. Any entity providing financial services, even without being a traditional bank, *might* conceptually fall under its broad regulatory scope if their activities are deemed sufficiently analogous.

**URL:** This core legislative document might be harder to find a direct, up-to-date link for online. It's usually part of the consolidated laws of Kiribati available through PacLII or the Attorney-General's chambers.

Bank of Kiribati Act (Consolidated, check for latest version) on PacLII

**Financial Institutions Act (Consolidated Act):**

**Date:** Various amendments, core legislation is older.

**Relevance:** This Act governs the licensing and supervision of financial institutions other than banks (e.g., credit unions, insurance companies). Similar to the Bank of Kiribati Act, if crypto exchanges or service providers were ever to be classified as "financial institutions," this act could be a basis for their regulation, though it currently does not apply directly to them.

**URL:** Similar to the Bank of Kiribati Act, likely found via PacLII.

Financial Institutions Act (Consolidated, check for latest version) on PacLII

**Neither Explicitly Permitted Nor Prohibited:** There are no specific laws in Kiribati that explicitly permit or prohibit individuals from trading cryptocurrencies or operating cryptocurrency exchanges. This means such activities exist in a legal grey area.

**No Licensing Framework:** There is no specific licensing regime for crypto exchanges or virtual asset service providers (VASPs). This lack of regulation means that:

Exchanges operating in or from Kiribati are not subject to specific regulatory oversight for their crypto activities.

Consumers engaging in crypto trading lack specific legal protections that would be found in regulated markets.

There is increased risk of fraud, scams, or money laundering due to the absence of a defined regulatory framework.

**Note:** Official Kiribati legislation is not always easily accessible online via stable, public URLs. You may need to consult the Kiribati Parliament's records or official government gazettes. A direct, stable URL for the full text is difficult to provide, but it is a key piece of legislation.

**Note:** Similar to the Financial Institutions Act, a direct, stable public URL for the full text may be difficult to obtain.

**Anti-Money Laundering and Counter-Terrorist Financing Act 2018 (as amended):** This is the core AML/CFT legislation. While it might not explicitly mention "virtual assets" or "stablecoins," financial institutions and designated non-financial businesses and professions (DNFBPs) are expected to report suspicious transactions. If stablecoin activities were deemed to fall under "financial services" broadly, they could be captured.

**Individuals:** Obtain and verify the customer's name, residential address, date of birth, and an identification number (e.g., passport, national ID card). Verification typically requires reliable, independent source documents or data.

**Legal Entities (Companies, Trusts):** Obtain and verify the legal name, legal form, proof of existence, powers that regulate and bind the legal person or arrangement, and the names of relevant persons holding senior management positions. Identification and verification of beneficial owners (those ultimately owning or controlling 25% or more of the entity) are mandatory.

**Purpose and Nature of Business Relationship:** Understanding the intended purpose and nature of the business relationship or occasional transaction.

**Source of Funds/Wealth:** For high-risk customers or transactions, obtaining information on the source of funds or wealth involved in the relationship or transaction.

**Ongoing Monitoring:** Continuously monitoring the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds.

**Risk-Based Approach:** VASPs must apply a risk-based approach, meaning:

**Simplified Due Diligence (SDD):** May be applied in lower-risk situations, where specific conditions are met and approved by the FIU.

**Enhanced Due Diligence (EDD):** Must be applied in higher-risk situations, such as relationships with politically exposed persons (PEPs), cross-border correspondent relationships, or transactions involving high-risk jurisdictions or complex, unusual transactions. EDD includes more intensive verification, increased monitoring, and senior management approval.

**Obligation to Report:** VASPs must report any transaction (or attempted transaction) where they know, suspect, or have reasonable grounds to suspect that the transaction involves proceeds of criminal activity or relates to terrorist financing.

**Reporting Authority:** All STRs must be submitted to the **Financial Intelligence Unit of Kiribati (FIU Kiribati)**.

**No Tipping-Off:** VASPs and their employees are prohibited from disclosing to the customer or any third party that an STR has been filed or that an investigation is underway.

**Customer Identification Records:** All documents and information obtained during the CDD process (identification documents, beneficial ownership information, business relationship details).

**Transaction Records:** Records of all domestic and international transactions, including the amount, currency, date, and parties involved (originator and beneficiary information).

**Correspondence:** Records of all correspondence and analyses related to CDD, business relationships, and transactions.

**Financial Intelligence Unit of Kiribati (FIU Kiribati)**

The FIU is responsible for receiving, analysing, and disseminating suspicious transaction reports, as well as providing guidance and overseeing compliance by reporting entities.

**URL:** While the FIU Kiribati may not have a frequently updated standalone website, information regarding its operations and Kiribati's AML/CFT framework can often be found through the **Asia/Pacific Group on Money Laundering (APG)** website, which is the regional FATF-style body Kiribati belongs to.

**Regulatory Ambiguity:** The lack of specific VASP legislation means there can be ambiguity. VASPs should proactively engage with the FIU Kiribati to seek clarification on their obligations and how the existing framework applies to their specific business model.

**FATF Standards:** Kiribati is expected to align with FATF standards. This means VASPs should design their AML/CFT programs based on the global best practices outlined in the FATF Recommendations and guidance for virtual assets, even if not explicitly codified in Kiribati law yet.

**Travel Rule:** While not explicitly mentioned in Kiribati's 2017 Act, the FATF "Travel Rule" (Recommendation 16 for wire transfers, extended to virtual asset transfers) requires VASPs to obtain and transmit originator and beneficiary information for virtual asset transfers above a certain threshold. VASPs should be prepared to implement this.

**No specific classification exists.** Kiribati's current laws do not define or classify stablecoins as e-money, payment tokens, securities, or any other distinct category.

**Potential Interpretation (Highly Unlikely to be Applied):**

If a stablecoin were structured as a share in an underlying asset or an investment contract, it *could theoretically* fall under general securities provisions if Kiribati had a robust securities law (which it largely does not, beyond basic company registration).

If it functioned purely as a payment instrument, it *might* be broadly seen as a form of financial service, but there are no specific e-money regulations adapted for crypto.

**No specific reserve requirements** for stablecoins are mandated in Kiribati.

Any entity operating with a stablecoin would not be subject to any specific prudential requirements for reserves or collateral as there is no specific licensing or regulatory category for them.

**No specific stablecoin issuer license exists.**

**General Financial Services:** If an entity were to engage in activities that are broadly defined as "financial services" (e.g., taking deposits, issuing financial instruments) under Kiribati's general financial institutions laws, it *might* be required to obtain a license from the Ministry of Finance and Economic Development (MFED). However, it's highly improbable that a stablecoin issuer would fit neatly into existing licensing categories designed for traditional banks or insurance companies without specific legislative updates.

**Anti-Money Laundering (AML) / Counter-Terrorist Financing (CFT):** Entities dealing with virtual assets, including stablecoins, would likely fall under the purview of Kiribati's AML/CFT laws, enforced by the Financial Intelligence Unit (FIU). This would necessitate customer due diligence (CDD), transaction monitoring, and suspicious transaction reporting (STR).

**No statutory redemption rights** for stablecoin holders are guaranteed by Kiribati law.

Any redemption rights would be purely **contractual** between the stablecoin issuer and the holder, subject to the terms and conditions agreed upon by the parties. Consumer protection laws in Kiribati are generally basic.

**No specific rules whatsoever.** Given the absence of even basic stablecoin regulation, there are no provisions or prohibitions specifically targeting algorithmic stablecoins.

**Kiribati does not have its own central bank in the traditional sense** and primarily uses the Australian Dollar (AUD) as its official currency.

**No known initiatives for a Kiribati Central Bank Digital Currency (CBDC).** Therefore, there is no framework for interaction between stablecoins and a national CBDC. Any future developments in Australia regarding an AUD CBDC could indirectly influence financial practices in Kiribati.

**Ministry of Finance and Economic Development (MFED):**

This is the primary governmental body responsible for financial policy and oversight in Kiribati. Any future development in financial regulation, including for digital assets, would likely originate here.

**Website (General):** While a specific Kiribati government portal exists, detailed legislative pages are often not well-maintained or publicly available online.

Kiribati Government: https://www.president.gov.ki/ (Navigate to Ministries -> Ministry of Finance and Economic Development for general information, though specific legislation is rarely hosted there).

The FIU is responsible for implementing Kiribati's Anti-Money Laundering and Counter-Terrorist Financing framework, which is the most likely area where virtual assets *might* be addressed under existing law. Kiribati is a member of the Asia/Pacific Group on Money Laundering (APG), adhering to FATF standards.

A version of this act (or its predecessor) can often be found on legal databases for the Pacific region:

**Pacific Islands Legal Information Institute (PacLII):** Search for "Kiribati Anti-Money Laundering"

http://www.paclii.org/ki/legis/consol_act/aamlcfta2018281/ (This link might go directly to the AML/CFT Act 2018 if available on PacLII, otherwise, search the database).

**Financial Institutions Act (Specific Version Varies):**

This act governs the licensing and supervision of traditional financial institutions (like banks) in Kiribati. It is highly unlikely to mention stablecoins, but it's the general framework for financial sector regulation.

**PacLII:** Search for "Kiribati Financial Institutions Act"

http://www.paclii.org/ki/legis/consol_act/fia1993214/ (This is an older version, a newer one may exist, but it demonstrates the type of general financial legislation available on PacLII).

**None specifically for crypto custody.** There is no public record of a licensing regime exclusively for digital asset custodians in Kiribati. General financial services licenses might exist, but these typically cover traditional banking, insurance, or investment services and would not explicitly apply to crypto custody unless specifically amended.

**Regulatory Reference:** There are no specific regulatory acts or decrees published by the Ministry of Finance or other bodies that outline such a licensing requirement.

**Segregation of Client Assets Rules:**

**No specific rules.** Given the absence of a dedicated framework, there are no explicit mandates for the segregation of client digital assets from a custodian's proprietary assets. In traditional finance, this is a cornerstone of investor protection, but it has not been extended to digital assets through specific legislation in Kiribati.

**No specific requirements.** There are no known legislative or regulatory requirements mandating insurance or bonding for digital asset custodians operating in Kiribati.

**No specific mandates.** Kiribati's regulatory environment does not impose technical requirements such as the use of cold storage for digital assets. Decisions regarding storage methods (hot, warm, cold) would be left to the operational discretion of the service provider.

**No specific definition.** Kiribati law does not provide a specific definition for a "qualified custodian" in the context of digital assets.

There is **no public record or indication of pending legislation** specifically addressing digital asset custody in Kiribati.

**Customer Due Diligence (CDD):** Identifying and verifying the identity of customers.

**Record Keeping:** Maintaining records of transactions and CDD information.

**Suspicious Transaction Reporting (STR):** Reporting transactions suspected of being linked to money laundering or terrorist financing to the Financial Intelligence Unit (FIU).

**Ministry of Finance and Economic Development (MFED):**

Responsible for economic policy, financial management, and oversight of the financial sector.

While they would be the primary body for any future financial regulation, their website does not currently host specific crypto regulations.

[Likely Ministry of Finance Website - official kiribati.gov.ki site doesn't always have a dedicated MFED page that is easily linked directly to legislation but would be part of the government portal.]

**Financial Intelligence Unit (FIU) of Kiribati:**

The body responsible for receiving, analyzing, and disseminating suspicious transaction reports, thereby implementing AML/CTF measures. They would be the point of contact for VASPs regarding AML compliance.

[APG website often lists contact for FIUs, but a direct Kiribati FIU website might not be publicly extensive.]

**Obligation:** Kiribati is required to implement UN Security Council sanctions, which target individuals and entities associated with terrorism (e.g., Al-Qaeda, ISIS under UNSCRs 1267, 1989, 2253) and the proliferation of weapons of mass destruction (e.g., North Korea under UNSCR 1718, Iran under UNSCR 1737, etc.).

**VASP Requirement:** VASPs operating in or from Kiribati must screen their customers, beneficial owners, and transactions against the **UN Security Council Consolidated List**.

UN Security Council Consolidated List: https://www.un.org/securitycouncil/content/un-sc-consolidated-list

**Applicability:** While OFAC sanctions primarily target U.S. persons, they have significant extraterritorial reach. Kiribati-based VASPs may be subject to OFAC sanctions if:

They conduct transactions in U.S. dollars.

They use U.S. financial services or infrastructure.

They have U.S. persons as customers or beneficial owners.

They deal with entities owned or controlled by U.S. persons.

Their activities involve a sanctioned entity or jurisdiction that has a U.S. nexus.

**VASP Requirement:** VASPs should screen their customers, beneficial owners, and transactions against OFAC's **Specially Designated Nationals and Blocked Persons (SDN) List** and other sanctions lists (e.g., Sectoral Sanctions Identifications List).

OFAC Sanctions Lists: https://www.treasury.gov/ofac/downloads/sdn.txt (SDN List)

OFAC Sanctions Programs and Country Information: https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information

**Applicability:** EU sanctions apply to all EU persons and entities, regardless of where they operate, and to non-EU entities conducting business within the EU. A Kiribati-based VASP dealing with EU customers, or having an EU nexus, would need to comply.

**VASP Requirement:** VASPs should screen against the **EU Consolidated List of persons, groups and entities subject to EU financial sanctions**.

EU Sanctions Map and Consolidated List: https://www.sanctionsmap.eu/ (Provides access to the consolidated list).