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Mongolia Issues First Digital Currency License under New Payment System Law

Last Updated March 4, 2021 3:45 PM
Josiah Wilmoth
Last Updated March 4, 2021 3:45 PM

Mongolia has taken a significant step forward toward bolstering its fintech sector, with the East Asian country’s central bank authorizing a local telecom operator to issue a digital currency under the country’s recently-passed national payment system bill.

As first reported by state-owned news agency Montsame , the Bank of Mongolia on Friday issued its first-ever digital currency license to Mobifinance — the fintech arm of Mobicom, the largest mobile phone provider in Mongolia.

Now licensed as a state-approved financial instrument, Mobicom’s virtual currency — dubbed “Candy ” — is considered a “non-cash payment instrument” whose value is pegged to Mongolia’s fiat currency, the tugrik.

Previously, Mobicom had only been authorized to issue the token to its mobile customers through a wallet app called Candy Pay. Using the app, customers could send funds to or from their bank, pay bills, shop online at select retailers from within the app, and transfer funds to other users.

However, beginning on Oct. 1, businesses throughout Mongolia will be allowed to use Candy as an official payment system, and though it remains to be seen to what extent this specific currency will catch on, Mobicom CEO Tatsuya Hamada said that he expects digital currencies to reshape the financial services landscape.

“As digital currencies have begun to circulate, ATMs and cards will become a thing of the past as well,” Hamada said.

Bank of Mongolia executives issued the license to Mobicom at a ceremonial event held at the central bank’s headquarters earlier today, indicative of the fact that regulators believe the newly-passed legislation will encourage innovation in the country by allowing companies outside of traditional banking institutions to participate in the financial services business.

According to Montsame’s report, central bank officials said that at least one other company has submitted an application for a digital currency license under the new legislation.

Featured Image from Mobicom/Twitter