Stablecoin issuer / redeemer in Sao Tome and Principe

No Explicit Classification: STP has not explicitly classified stablecoins as e-money, payment tokens, or securities.

E-money/Payment Tokens: If a stablecoin aims to maintain a stable value and is primarily used for payments and value transfer, the BCSTP might attempt to classify it under any existing or future e-money or payment service provider regulations. This would depend on the functionality and purpose of the stablecoin. STP would likely have a general framework for electronic payments and potentially e-money.

Securities: It is less likely for typical stablecoins (e.g., fiat-backed) to be classified as securities unless they grant rights akin to equity or debt instruments (e.g., profit-sharing, voting rights, or investment contracts). Given the nascent financial market in STP, a security classification for most stablecoins would be an unusual interpretation.

No Specific Requirements: There are no specific reserve requirements for stablecoins in STP as there is no specific stablecoin regulation.

Potential E-money Requirements: If a stablecoin were to be interpreted and regulated as e-money, then any existing or future regulations for e-money issuers in STP would likely mandate the safeguarding of user funds, potentially through full backing of issued e-money with liquid assets held in segregated accounts. However, this is a hypothetical application.

No Specific Licensing: There is no specific license for stablecoin issuers in STP.

Potential Application of Existing Licenses: If a stablecoin's activities were deemed to fall under existing regulated financial services (e.g., banking, payment services, e-money issuance), then the issuer would need to obtain the relevant license from the BCSTP. Operating without such a license for a regulated activity would be illegal.

E-money Issuer License: If stablecoins are treated as e-money, a license to issue e-money would be required.

Payment Service Provider License: If the stablecoin facilitates payment services, a payment service provider license might be necessary.

Banking License: If the stablecoin issuer conducts activities resembling traditional banking (e.g., taking deposits, lending), a full banking license would likely be required.

No Specific Rules: As there are no specific stablecoin regulations, there are no explicit rules governing redemption rights for stablecoins.

Contractual Basis: Redemption rights would primarily be governed by the terms and conditions set by the stablecoin issuer and any underlying contractual agreements.

Potential E-money Principle: If classified as e-money, existing or future e-money regulations would likely mandate that users have the right to redeem their e-money at par value at any time.

Neither a dedicated Registration nor Licensing Regime for VASPs: As of the latest information, STP does not have a specific regime for registering or licensing virtual asset service providers.

If an exchange facilitates the exchange of virtual assets for fiat currency (e.g., STN - Sao Tome Dobra) or vice versa, and offers services akin to traditional banking or money remittance, it might be deemed to be conducting activities that require a banking license or a payment service provider license from the Banco Central de São Tomé e Príncipe (BCSTP).

Local Presence: For any traditional financial license, a significant local presence is typically required, including:

A locally incorporated legal entity.

Physical office space.

Local management and staff, including a compliance officer.

Fit and proper assessment for directors and key personnel.

AML/KYC (Anti-Money Laundering/Know Your Customer): This is the most crucial and universally applicable requirement, even in the absence of specific crypto licensing. STP has AML/CFT legislation in line with international standards (FATF recommendations). Any entity dealing with funds, regardless of their nature (fiat or virtual assets), would be subject to:

Suspicious Transaction Reporting (STR) to the Financial Information Unit (FIU) of Sao Tome and Principe.

Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures.

Internal AML/CFT policies, controls, and training.

Lei n.º 10/2012, de 23 de Agosto (Law No. 10/2012, of August 23): This is the foundational law for the Prevention and Combat of Money Laundering and Terrorism Financing. It establishes the general framework for AML/CFT obligations for financial and non-financial institutions.

Lei n.º 7/2020, de 16 de Julho (Law No. 7/2020, of July 16): This law amended and republished Law No. 10/2012. Amendments typically reflect updated FATF recommendations and often broaden the scope of obliged entities or strengthen specific requirements (like beneficial ownership or risk-based approaches), which would implicitly apply to emerging sectors like virtual assets.

Identification and Verification of Customers:

Beneficial Ownership: Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of the customer, including natural persons who ultimately own or control the customer, or the natural person on whose behalf a transaction is being conducted.

Ongoing Monitoring: Conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the obliged entity’s knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Enhanced Due Diligence (EDD): Applying enhanced measures for higher-risk customers, relationships, or transactions, such as:

Report Suspicious Transactions: Report to the Financial Intelligence Unit (UIF) any transaction, attempted transaction, or activity that they know, suspect, or have reasonable grounds to suspect involves funds derived from criminal activity or is related to terrorism financing, regardless of the amount.

Unidade de Informação Financeira (UIF) – Financial Intelligence Unit:

Banco Central de São Tomé e Príncipe (BCSTP) – Central Bank of São Tomé and Príncipe:

There are no specific licensing requirements for cryptocurrency custodians in Sao Tome and Principe.

Segregation of Client Assets Rules:

There are no specific rules mandating the segregation of client digital assets for cryptocurrency custodians.

FATF Recommendation 15 specifically addresses new technologies and recommends that Virtual Asset Service Providers (VASPs), which would include custodians, be regulated for AML/CFT purposes, licensed or registered, and subject to effective systems for monitoring and supervision.