Chad

**No specific custodial license requirements exist for digital assets.** This is not because the activity is unregulated, but because regulated financial institutions are generally warned against or prohibited from engaging in activities involving crypto assets.

The BEAC views cryptocurrencies as inconsistent with the CEMAC monetary policy and the stability of its financial system. Engaging in such activities would likely be seen as a violation of existing banking and financial regulations rather than an activity requiring a specific crypto license.

**Segregation of Client Assets Rules:**

**No specific rules exist.** Since regulated financial institutions are not encouraged to hold or custody digital assets, there are no established rules for segregating client assets in this context.

**None.** As institutional custody is not permitted, no insurance or bonding requirements have been established.

**None.** The concept of a "qualified custodian" for digital assets is not defined in Chadian or BEAC regulations.

There is **no publicly available information indicating pending legislation specifically addressing cryptocurrency custody** in Chad or at the CEMAC level that would enable regulated entities to provide such services.

The prevailing sentiment from the BEAC has been one of caution and prohibition, focusing on financial stability risks, money laundering, and terrorist financing concerns associated with crypto assets.

**Reference (News Reporting on BEAC Stance):**

**BEAC Circular No. 001/GR/2022/GR of March 28, 2022**, explicitly prohibits financial institutions and all economic agents in the CEMAC region from engaging in activities related to crypto-assets, including holding, exchanging, selling, or purchasing crypto-assets. This directive was reinforced by a subsequent letter to all banks and financial institutions.

**Implication:** For entities operating *within* Chad (or any CEMAC country), the scope for legally conducting VASP activities is severely limited, if not outright eliminated. This means that domestic VASPs are effectively banned, and any attempt to operate one would be a direct violation of regional banking laws.

**Legal Reference:** While a direct, stable link to the BEAC Circular on their official website can be challenging, its existence and content are widely reported by financial institutions and legal firms. An example of a legal analysis referencing it:

Africa Business Law & Practice Newsletter, Gide Loyrette Nouel: https://www.gide.com/en/news-and-insights/publications/africa-business-law-and-practice-newsletter-may-2022 (Search for "BEAC Circular" within the document).

**Initial Stance (Prohibition):** The BEAC initially adopted a very strict stance against cryptocurrencies and virtual assets. In **Circular No. 001/GR/2022 of May 6, 2022**, the BEAC reminded all financial institutions and entities under its control of the **absolute prohibition** of all activities related to cryptocurrencies in the CEMAC zone. This explicitly included the holding, exchange, receipt, and payment in cryptocurrencies.

**Reference:** *BEAC Circular No. 001/GR/2022 (While an official English translation with a direct URL is often hard to find for BEAC documents, the French original is widely referenced in news and analysis concerning the region. An example reference in a public document might be: https://www.beac.int/wp-content/uploads/2022/05/COMMUNIQUE-DE-PRESSE-SUR-LA-POSITION-DE-LA-BEAC-VIS-A-VIS-DE-LA-CRYPTOMONNAIE.pdf - This is a press release related to the circular, not the circular itself, but confirms the stance.)*

**Evolving Stance (Strict Regulation of Virtual Assets):** More recently, the BEAC has introduced a framework for "virtual assets" which, while not legalizing cryptocurrencies broadly, defines and establishes a very strict control mechanism. **Regulation R-2023/CEMAC/UMAC/CM/04 of April 2023 on the Regulation of Virtual Assets in the CEMAC Zone** is the cornerstone of this framework.

This regulation defines **"Virtual Assets"** as any digital representation of value that can be digitally traded or transferred and used for payment or investment purposes. This definition is broad enough to include stablecoins.

It distinguishes between **"Crypto-assets"** (virtual assets that can be freely exchanged or transferred) and **"Digital Tokens"** (virtual assets issued by a single issuer as an instrument of payment or exchange). Stablecoins would likely fall under "Digital Tokens" if they aim to serve as a means of payment, or "Crypto-assets" if they are more speculative or broadly traded.

**Crucially, Article 4 of Regulation R-2023/CEMAC/UMAC/CM/04 states that any activity relating to virtual assets (including issuance, trading, exchange, and custody) is **prohibited unless expressly authorized by the BEAC**.**

**Classification:** Under this framework, stablecoins are generally considered **virtual assets**. Whether they could be classified as "e-money" or "payment tokens" would depend on specific characteristics and, critically, explicit authorization from the BEAC. As of now, no stablecoin has received such authorization, making their use and issuance largely prohibited.

**Reference:** *BEAC Regulation R-2023/CEMAC/UMAC/CM/04 (Full text might require direct access to BEAC official publications, but its existence and key provisions are widely reported. The official source would be the BEAC website's legal section once published for public access: https://www.beac.int/)*

**For Unauthorized Stablecoins:** There are **no specific reserve requirements** for stablecoins because their operation and issuance are generally prohibited.

**For E-Money Institutions (EMIs):** If a stablecoin *were* to be authorized and classified as e-money, it would then fall under the BEAC's existing framework for Electronic Money Institutions (EMIs). **Regulation R-2018/CEMAC/UMAC/CM/30 on Electronic Money Institutions** requires EMIs to:

Maintain **100% backing** of all e-money issued with liquid, low-risk assets (e.g., deposits in BEAC-approved banks).

Segregate customer funds from operational funds.

**Reference:** *BEAC Regulation R-2018/CEMAC/UMAC/CM/30 on Electronic Money Institutions (Available in French on the BEAC website, e.g., https://www.beac.int/regulations/)*

**For Stablecoins (Virtual Assets):** Under Regulation R-2023/CEMAC/UMAC/CM/04, any entity wishing to engage in activities related to virtual assets (including issuance of digital tokens/stablecoins) **must obtain prior authorization from the BEAC**. The regulation details the application process and conditions for authorization, which are expected to be very stringent. As of now, no such authorization has been publicly granted for a stablecoin issuer.

**For Unauthorized Stablecoins:** Holders of unauthorized stablecoins have **no protected redemption rights** under Chad's (CEMAC's) regulatory framework, as these assets are not recognized or are prohibited.

**For E-Money:** For authorized e-money, Regulation R-2018/CEMAC/UMAC/CM/30 mandates that e-money holders have the **right to redeem their e-money at par value** for central bank money (CFA Francs) at any time, without undue delay, from the issuer or its authorized distributors.

There are **no specific rules for algorithmic stablecoins** in Chad/CEMAC. Given that the general operation of stablecoins, particularly those not backed by traditional fiat reserves, is prohibited unless explicitly authorized by the BEAC, algorithmic stablecoins are effectively prohibited under the current framework. Their inherent volatility and lack of direct fiat backing make them highly unlikely to ever receive BEAC authorization.

The BEAC has been actively exploring the possibility of issuing its own **Central Bank Digital Currency (CBDC)**, referred to as the **eCFA**.

The BEAC views a potential eCFA as a means to modernize its payment systems, enhance financial inclusion, and maintain monetary sovereignty.

If an eCFA is implemented, it would likely be the **sole recognized and regulated digital form of the regional currency**. This would further solidify the BEAC's control over the digital money landscape and implicitly reinforce the prohibitive stance against private stablecoins, which would be seen as competing with or potentially undermining the stability of the national currency and the eCFA. The BEAC's move towards a CBDC often comes with a desire to tightly control the digital financial ecosystem.

**Reference:** *Various BEAC press releases and statements regarding its digital transformation and exploration of CBDCs (e.g., https://www.beac.int/)*

**Banque des États de l'Afrique Centrale (BEAC)**: This is the central bank for the six CEMAC member states, including Chad. The BEAC is the primary body responsible for monetary policy and financial sector regulation across the region, and its directives are binding on Chad's financial institutions.

**National Financial Institutions (under BEAC supervision):**

**Bank of Central African States - Chad (Direction Nationale de la BEAC au Tchad):** While not a separate regulatory body, it implements BEAC policies at the national level.

**Ministry of Finance and Budget (Ministère des Finances et du Budget):** This ministry would theoretically be involved in any national legislation, but as of now, there's no specific legislation from them regarding virtual assets.

**Circular No. 001/GR/2022 of the Governor of the BEAC (dated December 2022):**

**Content:** This circular reiterated the BEAC's firm stance against cryptocurrencies and virtual assets. It notably:

Stated that cryptocurrencies are not legal tender in the CEMAC zone.

Prohibited regulated financial institutions (banks, microfinance institutions) from carrying out, facilitating, or being involved in any transaction related to cryptocurrencies or virtual assets.

Warned the public about the speculative nature, high volatility, and risks associated with virtual assets, including money laundering, terrorist financing, and consumer protection issues.

Emphasized the lack of regulation and oversight for these assets within the CEMAC zone.

**Reference (News reporting on the circular):**

*Note: Direct links to the full text of BEAC circulars can be challenging to find publicly on their website. However, the content and implications were widely reported by major news agencies.*

**Individuals:** There is no explicit national law in Chad that *bans* individuals from buying, selling, or holding cryptocurrencies. However, given the BEAC's strong warnings and prohibition for financial institutions, engaging in crypto trading is done at one's own risk, without any legal recognition, regulatory oversight, or consumer protection.

**Risks:** Individuals face significant risks including market volatility, scams, lack of recourse in disputes, and potential difficulties in converting crypto to fiat currency via traditional banking channels due to BEAC restrictions on banks.

**Domestic:** There are no licensed, regulated, or officially recognized cryptocurrency exchanges operating within Chad. Any local initiatives would operate outside of official oversight.

**International:** Chadian citizens might access international cryptocurrency exchanges (e.g., Binance, Coinbase, etc.), but these transactions face hurdles. Financial institutions in Chad (banks, payment providers) are prohibited from facilitating transactions related to virtual assets, making it challenging to deposit fiat currency into or withdraw fiat currency from these platforms directly via traditional banking routes in Chad. This often pushes users towards peer-to-peer (P2P) trading or unofficial channels.

**CEMAC's Stance on Cryptocurrencies:** Chad is a member of the Economic and Monetary Community of Central Africa (CEMAC). The **Banque des États de l'Afrique Centrale (BEAC)**, which is the central bank for CEMAC member states, has historically taken a very restrictive stance on cryptocurrencies and virtual assets. Directives and circulars from the BEAC have effectively prohibited or severely restricted the use, trade, and even possession of cryptocurrencies within the CEMAC zone, citing concerns about financial stability, monetary policy sovereignty, and AML/CFT risks.

**Lack of Specific VASP Legislation:** While Chad has general AML/CFT legislation aligned with international standards (primarily driven by FATF recommendations and its regional body, GABAC), it lacks specific national legislation that explicitly licenses, regulates, or defines AML/KYC requirements for VASPs as a distinct category of financial institutions.

**Primary Legislation:** **Law N°004/PR/2020** modifying **Law N°006/PR/2010** on the Fight against Money Laundering and Terrorist Financing. This is the cornerstone legislation defining reporting obligations, predicate offenses, and the functions of the Financial Intelligence Unit.

**Implementing Decrees:** Various decrees further detail the application of the AML/CFT law.

**International Conventions:** Chad has ratified several international conventions related to AML/CFT, including the Palermo Convention, the Vienna Convention, and the International Convention for the Suppression of the Financing of Terrorism.

**Prohibition:** The Banque des États de l'Afrique Centrale (BEAC) has issued directives (e.g., circulars in 2022 and earlier) that effectively prohibit or severely restrict cryptocurrency activities within the CEMAC zone, including Chad. These directives aim to safeguard monetary stability and prevent financial crime risks.

**Implication for VASPs:** This means that, currently, legally establishing and operating a VASP in Chad is highly problematic, if not outright impossible. Any operations would be considered unauthorized and potentially illegal.

Carrying out occasional transactions above a certain threshold (e.g., EUR 1,000 equivalent for VASPs, as per FATF guidance).

There is a suspicion of money laundering or terrorist financing.

There are doubts about the veracity or adequacy of previously obtained customer identification data.

**Identification and Verification of Customer Identity:**

**Natural Persons:** Obtain full name, date of birth, place of birth, nationality, physical address, and a unique identification number (e.g., national ID card, passport number). Verification through reliable, independent source documents or data.

**Legal Entities:** Obtain legal name, legal form, proof of existence (e.g., registration certificate), physical address of operations, names of directors/authorized representatives, and identify beneficial owners.

**Identification of Beneficial Owners:** Take reasonable measures to understand the ownership and control structure of the customer and identify the natural persons who ultimately own or control the customer. This often involves identifying individuals holding 25% or more of shares or voting rights, or otherwise exercising control.

**Understanding the Purpose and Nature of the Business Relationship:** Obtain information on the intended purpose and nature of the customer's activities and the anticipated transactions.

**Ongoing Monitoring:** Continuously monitor the business relationship, including scrutiny of transactions undertaken throughout the course of that relationship, to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile.

**Enhanced Due Diligence (EDD):** Apply EDD for higher-risk categories, which would typically include:

Customers from high-risk jurisdictions (as identified by FATF, GABAC, or national authorities).

Transactions without an apparent economic or lawful purpose.

Accounts with unusually high transaction volumes or values.

**Simplified Due Diligence (SDD):** May be applied in low-risk scenarios, as defined by regulations, but VASPs are generally considered higher risk by default.

**Obligation to Report:** VASPs would be legally obligated to report any suspicious transactions, attempts at transactions, or activities that give rise to a suspicion of money laundering or terrorist financing to Chad's Financial Intelligence Unit (FIU).

**No Tipping-Off:** VASPs and their employees are prohibited from informing the customer or third parties that a suspicious transaction report is being or has been made.

All customer identification data obtained through CDD.

Transaction records, including the amount, currency, type of virtual asset, date, and identities of the sender and recipient (Travel Rule considerations, if implemented for VASPs).

Records of suspicious transaction reports filed.

Records of analyses performed in support of suspicious transaction reporting.

**Internal Controls:** Implement internal policies, procedures, and controls to prevent ML/TF.

**Compliance Officer:** Appoint a designated compliance officer at the management level responsible for AML/CFT compliance.

**Training:** Provide ongoing AML/CFT training to relevant employees.

**Risk Assessment:** Conduct institutional risk assessments to identify and mitigate ML/TF risks.

**Name:** **Cellule Nationale de Traitement des Informations Financières (CENTIF)** - Tchad

**Role:** CENTIF is Chad's FIU. It receives, analyzes, and disseminates financial intelligence on suspected money laundering and terrorist financing to law enforcement agencies. It is responsible for ensuring compliance with AML/CFT obligations by reporting entities.

**GABAC (Groupe d'Action contre le Blanchiment d'Argent en Afrique Centrale):** https://gabac.org/ (Look for sections on member states or FIUs)

**Banque des États de l'Afrique Centrale (BEAC):** The central bank for CEMAC, crucial for monetary policy and financial stability, and currently the main body prohibiting virtual assets.

**Commission Bancaire de l'Afrique Centrale (COBAC):** The banking supervisory body for CEMAC.

**Relevance to Sanctions:** FATF Recommendations 6 and 7 specifically address targeted financial sanctions related to terrorism and proliferation financing. Recommendation 15 covers virtual assets and VASPs, urging countries to regulate and supervise VASPs for AML/CFT purposes, including sanctions compliance.

**KYC/CDD:** Robust customer identification and due diligence processes.

**Transaction Monitoring:** Ongoing monitoring of transactions for suspicious activities, including potential sanctions evasion.

**Suspicious Transaction Reports (STRs) / Suspicious Activity Reports (SARs):** Reporting of suspicious activities to Chad's FIU (if one is operational and relevant for crypto, given the BEAC prohibition).

**Travel Rule:** For VASPs operating legally elsewhere and transacting with Chadian nationals, they would be expected to implement the FATF "Travel Rule" by obtaining and transmitting originator and beneficiary information for crypto transfers above a certain threshold.

**Yes, indirectly through regional CEMAC legislation.** The CEMAC zone, guided by GABAC, has adopted a comprehensive anti-money laundering and combating the financing of terrorism (AML/CFT) framework that incorporates the updated FATF Recommendations, including those related to Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs).

The primary legal instrument is **Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021 on the Prevention and Suppression of Money Laundering and Terrorist Financing in CEMAC Member States**, adopted on May 5, 2021. This regulation aligns with FATF Recommendation 15 (New Technologies) and Recommendation 16 (Wire Transfers, which now includes VA transfers or the "Travel Rule").

Chad, as a CEMAC member state, is obliged to transpose this regional regulation into its national law or directly apply it.

The **CEMAC Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021** was adopted on **May 5, 2021**. Its provisions are generally effective from this date, though national implementation/transposition might involve additional steps and timeframes for VASPs to comply.

The CEMAC Regulation, following FATF Recommendation 16 and its Interpretive Note, requires VASPs to obtain and transmit required originator and beneficiary information for virtual asset transfers.

**For cross-border transfers:** The threshold is **EUR 1,000 (or equivalent in other currencies/VAs)**. Transfers below this threshold may still require information collection if there is a suspicion of money laundering or terrorist financing.

**For domestic transfers:** The FATF recommends a de minimis threshold of EUR/USD 1,000. However, countries have discretion regarding applying a threshold for purely domestic transfers, or to apply a lower or no threshold. The CEMAC regulation generally adopts the FATF standard, implying the EUR 1,000 threshold for virtual asset transfers.

The CEMAC Regulation defines VASPs broadly to align with FATF definitions. This includes any natural or legal person who, as a business, conducts one or more of the following activities for or on behalf of another natural or legal person:

Exchange between virtual assets and fiat currencies.

Exchange between one or more forms of virtual assets.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

Participation in and provision of financial services related to an issuer’s offer or sale of a virtual asset.

This means all entities operating in Chad (and other CEMAC states) that provide these services, whether centralized exchanges, brokers, custodians, or other platforms facilitating VA transfers, are subject to the requirements.

The CEMAC Regulation, like the FATF Recommendations it's based on, does not prescribe specific technical solutions for implementing the Travel Rule. Instead, it mandates that VASPs must have systems and procedures in place to:

**Collect:** The required originator and beneficiary information (name, account number/VA wallet address, physical address/national ID number/customer ID number, date and place of birth).

**Transmit:** This information to the beneficiary VASP during or before the transaction.

**Hold:** The collected information securely and make it available to competent authorities upon request.

**Screen:** Transactions for sanctions compliance and suspicious activity.

VASPs are expected to adopt interoperable solutions that allow for the secure and efficient exchange of this data between different VASPs globally.

The CEMAC Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021 (and its national transposition in Chad) outlines administrative and criminal penalties for non-compliance with AML/CFT obligations. These can include:

**Administrative sanctions:** Fines, suspension or revocation of licenses, and prohibition from holding management positions within financial institutions for individuals.

**Criminal sanctions:** Imprisonment and heavier fines for serious offenses, particularly those related to money laundering or terrorist financing facilitation.

The exact nature and severity of penalties would be detailed in the specific articles of the CEMAC Regulation and any corresponding Chad national legislation.

**CEMAC Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021 (French):** This is the core document. Finding an official public URL can sometimes be difficult for CEMAC regulations, but it is widely cited by GABAC and other bodies. It can often be found through legal databases or GABAC reports.

**GABAC Official Website:** https://www.gabac.org/ (You may need to navigate to "Publications" or "Textes Réglementaires" for relevant documents).

**FATF Recommendations:** The foundational document that CEMAC/GABAC uses as its basis.

**FATF R.15 (New Technologies) & R.16 (Wire Transfers, including VA Transfers):** https://www.fatf-gafi.org/recommendations.html

**Legal Basis:** United Nations Security Council (UNSC) Resolutions are binding on all UN member states, including Chad. Chad is required to implement these resolutions into its national law. UN sanctions typically target specific individuals, entities, and groups involved in terrorism, proliferation of weapons of mass destruction, or specific conflict zones.

**Screening:** VASPs must screen their customers (KYC/CDD), beneficial owners, and transaction counterparties against the **UN Security Council Consolidated List**. This list includes individuals and entities designated under various sanctions regimes (e.g., Al-Qaida, ISIS, Taliban, DPRK, Iran proliferation, etc.).

**Freezing:** If a VASP identifies a match, it must immediately freeze any funds or economic resources belonging to or controlled by the designated person/entity.

**Reporting:** The VASP must report the match and the actions taken to its relevant national competent authority (e.g., Financial Intelligence Unit - FIU).

**Legal Basis:** OFAC administers and enforces U.S. economic and trade sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. OFAC sanctions have extraterritorial reach, meaning they can apply to non-U.S. persons if their activities involve a "U.S. nexus" (e.g., using U.S. dollar clearing, U.S.-based technology, or engaging with U.S. persons).

**Screening:** VASPs must screen all customers, beneficial owners, and transaction counterparties against the **Specially Designated Nationals and Blocked Persons (SDN) List** and other OFAC sanctions lists.

**Blocking:** U.S. persons, and non-U.S. persons with a U.S. nexus, are prohibited from engaging in any transactions with SDNs and must block (freeze) any funds or assets belonging to SDNs.

**Reporting:** Blocked assets and rejected transactions must be reported to OFAC.

**Compliance Programs:** VASPs are expected to implement risk-based sanctions compliance programs, including KYC, geographic risk assessments, and transaction monitoring.

**OFAC Guidance on Virtual Currency:**

**A Framework for OFAC Compliance Commitments (May 2019):** https://home.treasury.gov/system/files/126/framework_ofac_commitments_5-2019.pdf

**Legal Basis:** The European Union implements its own autonomous sanctions regimes, often complementing UN sanctions, and has extraterritorial reach for EU persons and entities. EU sanctions are typically imposed through Council Decisions and Regulations.

**Screening:** VASPs subject to EU jurisdiction must screen their customers, beneficial owners, and transaction counterparties against the **EU Consolidated Financial Sanctions List**.

**Freezing:** Funds and economic resources of designated persons/entities must be frozen.

**Reporting:** VASPs must report matches and actions taken to their national competent authorities (e.g., FIU, national sanctions authority).

**EU Consolidated Financial Sanctions List:**

**EU Official Journal:** For the most up-to-date legal texts of sanctions regulations.

**URL:** https://eur-lex.europa.eu/homepage.html (Search by regulation/decision number).