Stablecoin issuer / redeemer in San Marino

Legge Delegata n. 129 del 2019 – Legge per le tecnologie a registro distribuito (Delegated Law No. 129 of 2019 – Law for Distributed Ledger Technologies - DLT Law): This is the foundational law that provides the legal framework for DLT-based activities, defines types of tokens, and delegates regulatory power to the BCRSM for DLTs applied to financial instruments.

Decreto della Banca Centrale n. 2 del 2020 – Regolamento attuativo della Legge Delegata n. 129 del 2019 in materia di emissione di strumenti finanziari tramite DLT (BCRSM Decree No. 2 of 2020 – Implementing Regulation of Delegated Law No. 129 of 2019 concerning the issuance of financial instruments via DLT): This decree, issued by the Central Bank, specifically details the rules for issuing financial instruments, including security tokens and potentially certain types of stablecoins, on DLTs.

Authorized Operator for Distributed Ledger Technologies (ODLT): Law 129/2019 introduced the concept of an "Authorized Operator for Distributed Ledger Technologies" (ODLT). All entities wishing to operate DLT-based activities in San Marino that involve regulated financial instruments or services must obtain authorization from the BCRSM.

E-money Institution License: For stablecoins classified as e-money.

Investment Firm/Financial Institution License: For activities related to security tokens (e.g., issuance, trading platforms).

If a stablecoin is designed to maintain a stable value, is denominated in fiat currency (e.g., EUR, USD), and is redeemable at par by the issuer, it would likely be classified as e-money if issued by an authorized entity or used as a payment instrument. Issuers of such tokens would be subject to e-money regulations, requiring a specific license from the BCRSM. The BCRSM Decree No. 2/2020, referring to financial instruments, clarifies that where DLTs are used for activities falling under existing financial sector laws (e.g., e-money, payment services), those specific laws apply.

If a stablecoin represents a share in a basket of assets, a debt instrument, or ownership of specific underlying assets (e.g., real estate, commodities), it would likely be classified as a security token under Law 129/2019. The issuance of security tokens is regulated by BCRSM Decree No. 2/2020, which sets requirements for public offerings, whitepapers, and investor protection.

Lack of Direct Fiat/Asset Backing: Algorithmic stablecoins, which rely on software algorithms and market incentives rather than direct fiat or collateral backing to maintain their peg, would not likely qualify as e-money tokens under San Marino's framework due to the absence of the required full and segregated fiat reserves.

Classification Challenges: Their classification would be challenging. They might be considered complex, high-risk digital assets.

Full Backing: The issuer must hold assets equivalent to the value of the e-money in circulation.

Segregation: These assets must be segregated from the issuer's operational funds and held in secure accounts (e.g., credit institutions).

Custody: Rules on the safe custody of these reserve assets are stipulated.

Example: Circolare n. 1/2020 – Disposizioni in materia di prevenzione e contrasto del riciclaggio e del finanziamento del terrorismo per gli operatori DLT (Circular No. 1/2020 – Provisions concerning the prevention and combating of money laundering and terrorist financing for DLT operators).

Law No. 171 of December 17, 2019, "Regulations for Distributed Ledger Technologies and Blockchain for Business" (Legge 171/2019): This law defines DLT, virtual assets, and establishes the framework for Operators in Distributed Ledger Technologies (ODLTs).

BCRA Circular No. 64 of 15 September 2020, "Disciplining the activities of Operators in Distributed Ledger Technologies": This circular provides detailed implementation rules for Law 171/2019, specifying the requirements for obtaining authorization (registration) as an ODLT.

Must be a joint-stock company (Società per Azioni - S.p.A.) or a limited liability company (Società a responsabilità limitata - S.r.l.) established in San Marino.

Must have its registered office and effective management in San Marino.

€300,000 for ODLTs providing services directly to the public (including VASPs like exchanges and custody providers) and holding client funds or virtual assets.

The BCRA may require a higher capital amount based on the complexity, scale, and risk profile of the proposed activities.

Appointing an AML Officer and a Board-level AML Compliance Officer.

Establishing a Suspicious Transaction Reporting (STR) mechanism and reporting to the Financial Intelligence Agency (AIF).

Legal Persons/Arrangements: Obtain and verify legal name, legal form, address, proof of existence, powers that regulate and bind the legal person/arrangement, and names of individuals authorized to act on its behalf.

Beneficial Ownership (BO):

Enhanced Due Diligence (EDD): Apply EDD in higher-risk situations, including but not limited to:

Risk-Based Approach (RBA): VASPs must implement a risk-based approach to AML/CFT, meaning they should:

Conduct ongoing monitoring of the business relationship and transactions undertaken throughout the course of that relationship.

Current IGR Rate: The standard corporate income tax (IGR) rate in San Marino is 17%. Special reduced rates or incentives may apply to new businesses or specific types of activities under certain conditions.