Stablecoin issuer / redeemer in Mozambique

Electronic Money (E-money): This is the most likely classification for stablecoins pegged to a fiat currency (like the Metical - MZN, USD, or EUR) and intended for payment purposes.

Law No. 12/2009, of March 17 – Payment System Law: This law establishes the legal framework for the national payment system, defining payment instruments and electronic money. It broadly defines electronic money as monetary value represented by a claim on the issuer, stored electronically, issued on receipt of funds, and accepted as a means of payment by persons other than the electronic money issuer.

Notice No. 5/GBM/2021, of March 26 – Regulation on Payment Instruments and Electronic Money Institutions: This regulation further details the requirements for issuing electronic money and licensing Electronic Money Institutions (EMIs).

Interpretation: If a stablecoin aims to maintain a stable value against a fiat currency and functions as a medium of exchange, it would likely be considered "electronic money" by the Banco de Moçambique, requiring the issuer to be licensed as an EMI.

Full Backing: Notice No. 5/GBM/2021 generally requires electronic money to be issued upon receipt of funds and backed by liquid assets equivalent to the value of the electronic money in circulation.

Segregation: Funds received in exchange for electronic money must be safeguarded, typically by being deposited in a segregated account at a licensed financial institution or invested in secure, low-risk assets.

Auditing: Regular audits would likely be required to verify the existence and value of the reserves.

Electronic Money Institution (EMI) License: Any entity wishing to issue electronic money in Mozambique must be licensed by the Banco de Moçambique as an Electronic Money Institution (EMI) or be a commercial bank.

Minimum capital requirements.

Robust governance and internal control frameworks.

Fit and proper criteria for shareholders and management.

Detailed business plan.

Operational resilience and cybersecurity measures.

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

Redemption at Par: Holders of electronic money generally have the right to redeem their electronic money at par value at any time, without undue delay, from the issuer.

Transparency: Issuers are required to clearly communicate the terms and conditions of redemption to users.

Regulatory Challenge: Algorithmic stablecoins, by their nature, lack direct fiat or asset backing and rely on complex algorithms and market incentives to maintain their peg. This characteristic makes them highly unlikely to fit the definition of "electronic money" under Mozambican law, which emphasizes full backing and segregation of funds.

High Scrutiny: Such stablecoins would likely face extreme scrutiny from the Banco de Moçambique due to their inherent volatility risks and the lack of traditional collateral. It's highly improbable they would be permitted to operate under the current framework without significant legislative changes. They might even be viewed as speculative instruments rather than stable payment tokens.

Banco de Moçambique's Position: The BdM has repeatedly issued warnings and communiqués stating that cryptocurrencies are not legal tender in Mozambique, are not regulated by the central bank, and transactions involving them are high risk. They emphasize that there is no official protection for consumers or investors in virtual assets.

Specific Reference: Aviso Nº 03/GBM/2021, de 2 de Agosto (Warning Nº 03/GBM/2021, of August 2nd). This warning explicitly states that virtual assets are not considered currency, are not issued or guaranteed by the BdM, and are not subject to the legal regime of payment instruments or other financial instruments. It also highlights the risks associated with price volatility, cybercrime, lack of consumer protection, and potential for illicit activities.

No Specific Licenses: As a direct consequence of the above, there are no specific cryptocurrency exchange licenses, crypto custody licenses, or crypto payment processor licenses issued by the BdM or any other Mozambican authority for entities dealing solely in virtual assets.

Licensing for Traditional Financial Services: If an entity's operations involve traditional financial services (e.g., fiat-to-crypto exchanges, crypto payment processors that handle fiat currency, or entities holding fiat funds for crypto purchases), then they might fall under the existing financial licensing requirements supervised by the Banco de Moçambique or other financial regulators, depending on the specific nature of their activities. This would be interpreted under existing laws such as:

Lei do Sistema de Pagamentos (Law of the Payment System): Lei n.º 2/2016 de 27 de Junho – This law governs payment service providers (PSPs) and electronic money institutions (EMIs) that deal with fiat currency. If a crypto firm offers services that involve processing fiat payments, it could potentially be required to obtain a PSP or EMI license.

Local Presence: Typically, regulated financial institutions in Mozambique are required to have a physical presence and be incorporated locally.

Fit and Proper Tests: Directors, managers, and significant shareholders of regulated financial institutions must undergo "fit and proper" tests by the BdM to ensure their integrity and competence.

Operational and IT Requirements: Robust systems for risk management, internal controls, cybersecurity, and data protection would be mandatory.

Pre-application discussions with the Banco de Moçambique.

Submission of a comprehensive business plan, outlining services, operational model, risk management, and financial projections.

Documentation of corporate structure, shareholders, and management (including "fit and proper" assessments).

Detailed AML/CFT policies and procedures.

IT and security infrastructure details.

Ongoing supervision and reporting requirements once licensed.

Domestic Implementation: Mozambique's Lei n.º 14/2013, de 12 de Agosto (Law on Preventing and Combating Money Laundering and the Financing of Terrorism) requires reporting entities (primarily traditional financial institutions) to identify customers, monitor transactions, and report suspicious activities. While it doesn't explicitly mention VASPs, the spirit of the law and international standards (FATF) would extend these obligations to any entity facilitating financial transactions. The Unidade de Informação Financeira de Moçambique (UIF), Mozambique's Financial Intelligence Unit, is responsible for enforcing this law.

Know Your Customer (KYC): Robust customer due diligence (CDD) procedures for all users.

Sanctions Screening: Regular and ongoing screening of new and existing customers, beneficial owners, and transaction counterparties against the OFAC SDN List, EU Consolidated List, and UN Consolidated List.

FATF Standards: Mozambique is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which is an associate member of the Financial Action Task Force (FATF). FATF Recommendations explicitly cover virtual assets and VASPs, requiring them to implement AML/CFT measures, including targeted financial sanctions.

Law No. 14/2013 of August 12 (AML/CFT Law): This law establishes the legal framework for preventing and combating money laundering and the financing of terrorism.

For Businesses (Imposto sobre o Rendimento das Pessoas Colectivas - IRC):

IRC Rate: A flat rate of 32%.

Business Profits from Crypto Activities: Entities operating a crypto exchange, providing crypto-related services, or trading crypto as their primary business would have their profits taxed under IRC at the 32% rate.