Chad -- Licensing Requirements Regulatory Overview

**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.