Ministry of Finance: Trading in cryptocurrencies is illegal in Montenegro

"Montenegro, as a candidate country for membership in the European Union (EU), will be the first country outside the EU to harmonize the regulation of digital assets with EU assets," said the Ministry.

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Illustration, Photo: Shutterstock
Illustration, Photo: Shutterstock
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

In Montenegro, there is currently no legal regulation that defines the field of cryptocurrency trade or digital asset business in general, which means that this type of transaction that is potentially currently carried out in Montenegro is illegal, the Ministry of Finance announced.

From that government department, they recalled that, as a result of learning that such transactions are performed from an illegal crypto machine, that is, an ATM for cryptocurrencies, which exists in Tivat, on June 13, they sent an order to the Revenue and Customs Administration to, from the aspect of their competence, perform an inspection control of the facility Salon Prive.

"We also expect the Central Bank (CBCG) to get involved, from the aspect of its competences, as well as the Ministry of Internal Affairs (MUP), i.e. the Police Directorate (UP) and their Financial Intelligence Unit (FIU), especially bearing in mind suspicions of possible money laundering transactions money with the help of cryptocurrencies and the fact that some persons engaged in these activities are located in Montenegro, and at the same time they are under international investigations or criminal court procedures", they told the agency Mina-business from the Ministry, answering the question whether in Montenegro Gori transacts with cryptocurrencies.

They said that this area is not legally regulated, but that the possibility of adopting such legal acts is being considered.

"Namely, within the Council for Financial Stability, a Working Group was formed in November last year with the aim of analyzing existing legal models in other countries and drafting a national legal act concerning the field of digital assets. The working group, in addition to the representatives of the Ministry of Finance, consists of representatives of the CBCG, the Commission for the Capital Market and the Insurance Supervision Agency (ANO), while the representatives of the FIU have the status of associate members", the Ministry reminded.

That working group systematically, with the advisory support of World Bank experts, examines comparative practice in the field of digital property regulation around the world (China, Turkey, Singapore, South Africa, Serbia) and works on creating national solutions that will be harmonized with the new EU regulation on regulation of the cryptoasset market, adopted by the European Parliament on May 20.

"Montenegro, as a candidate country for membership in the European Union (EU), will be the first country outside the EU to harmonize the regulation of digital assets with EU assets," said the Ministry.

Therefore, in the Working Group, as they informed the representatives of the Ministry, they are actively summarizing already adopted national legal solutions in other countries, from the point of view of the impact on financial stability, consumer protection, provision of efficient and safe payment transactions, risks associated with tax treatment and prevention of money laundering and financing of terrorism, as well as Montenegro's aspirations to become the first next member of the EU.

"The expectation of the Working Group is that the first version of the Draft Law will be completed by the end of this year, which will be forwarded to the World Bank and the International Monetary Fund (IMF) for comments and suggestions before being sent to public discussion," the Ministry stated.

The working group, as they said, concluded that the most expedient model for rounding up the regulation of digital property is provided by the creation of three legal solutions.

"The regulatory framework for cryptoassets will be incorporated in the Draft Law on Digital Assets and will be based on the transposition of EU regulations in this area - The Markets in Cryptoassets (MICA), which represents the most comprehensive regulatory framework for cryptoassets in the world," said the Ministry.

According to the assessment of the Working Group, in the area of ​​prevention of money laundering and financing of terrorism, it is necessary to harmonize with FATF recommendations 15 and 16, which refer to work with virtual assets and service providers connected to virtual assets, while the tax treatment of digital assets will be rounded off through a set tax laws.

"It is important to emphasize that the question of the date and application of future legal solutions in this area is still under consideration, bearing in mind that the implementation of MICA in the European Union will begin in July next year, and only for the part related to stablecoins, while the rest of the MICA regulation will be applied only from January 2025", specified the Ministry.

The preliminary position of the Working Group and the Ministry of Finance is that Montenegro, as a candidate country for membership, should not apply EU regulations before they are implemented in EU countries, and this issue will certainly be the subject of further joint analysis with representatives of the EU and the IMF. and the World Bank.

"We are convinced that Montenegro, as a country striving for accelerated membership in the EU, should also position itself in this area as a credible and transparent destination, where legal security will be provided to the crypto industry and investors, but at the same time provide an adequate level of user protection ", assessed the representatives of the Ministry.

As they concluded, the Ministry of Finance and regulators in Montenegro are of the opinion that we should not succumb to quick and incomplete national solutions, which can lead to an unnecessary escalation of risks and which, in the end, can cost us dearly when it comes to Montenegro's international reputation.

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