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Central Bank of Samoa: Crypto Companies Will be Treated as Financial Institutions

Last Updated March 4, 2021 3:37 PM
Mark Emem
Last Updated March 4, 2021 3:37 PM

The Central Bank of Samoa has warned that individuals who promote cryptocurrencies in the island nation will be subjected to the same treatment as financial institutions.

According to a statement issued by the reserve bank of Samoa, promoters of cryptocurrency will have to abide by the country’s existing legislation on money laundering. Consequently, such cryptocurrency promoters will be required to obtain the necessary licenses and follow the reporting requirements like all other financial institutions.

“…any person who wishes to promote Cryptocurrency or Digital currency is considered under the Money Laundering prevention Amendment Act 2018 as a Financial Institution,” the statement  said. “This means it must have a valid business licence issued in Samoa and is required to follow the Central Bank’s reporting requirements for Financial Institutions.”

Not a Legal Tender

At the same time, the Central Bank of Samoa (CBS) also warned that cryptocurrencies do not possess a legal tender status in the island country necessary for their acceptance as a currency. The reserve bank consequently advised investors to be aware of the risks that they are taking before buying.

“People who invest in any of the cryptocurrencies do so at their own risk,” warned the Central Bank of Samoa. “There is no guarantee that cryptocurrencies will be accepted as a medium of exchange, or will hold their value.”

Despite its anti-cryptocurrency stance, the CBS has acknowledged that blockchain technology could be transformative especially in the financial sector. As a result, the reserve bank of the Asia-Pacific nation is exploring blockchain technology as a ‘platform for promoting financial inclusion in Samoa’.

Onecoin Cryptocurrency Transactions Blocked

This is not the first time Samoa’s central bank is coming out against cryptocurrencies. Four months ago the reserve bank of the Polynesian country issued a directive blocking all foreign exchange transactions involving the controversy-laden Oncecoin cryptocurrency. At the time the CBS said that it based its decision on the suspicion that Onecoin was a pyramid scheme. Additionally, the Samoan central bank also said it was doing so for the benefit of the country’s forex reserves.

“This also ensures the protection of Samoa’s foreign currency reserves, which is at risk due to the high number of people wanting to remit money overseas for this get rich quick scheme,” the CBS said in a statement .

The CBS is not the only reserve bank in the Asia-Pacific region to have come out against cryptocurrencies in the recent past. As reported by CCN.com a few days ago, the Bank of Laos recently warned against cryptocurrencies saying they did not qualify to be classified as currencies.

Featured image from Wikimedia.