Cryptocurrency Regulatory Landscape in Bosnia and Herzegovina Prior to 2024

As of 2023, Bosnia and Herzegovina (BiH) was still in the early stages of developing a comprehensive regulatory framework for cryptocurrencies. The country’s approach to crypto regulation was characterized by incremental changes and ongoing efforts to establish a formalized legal structure.

The most significant development was the recognition of virtual currencies by the law in Republika Srpska (RS), one of the two administrative entities of Bosnia and Herzegovina, through amendments to the Law on Securities Market, which came into effect on September 21, 2022. This was a notable step, considering that BiH consists of two entities – the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), and a condominium – Brčko District, with legislation being introduced at both the state and entity levels depending on the subject matter.

In Republika Srpska, a service provider related to virtual currencies is defined as a legal or natural person that offers a range of services, including custody and management of virtual currencies on behalf of third parties, organizing a platform for trading of virtual currencies, exchange of virtual currencies for official currency or another virtual currency, transfer of virtual currency, and the sale of virtual currencies. For operating in RS, establishing a legal presence and registering with the Securities Commission of RS is necessary. However, there were no regulatory licenses specific to crypto, but a notification process and entry into the register with the Securities Commission of RS were required, along with compliance with Anti-Money Laundering (AML) requirements and other financial regulations.

At the national level, Bosnia and Herzegovina was preparing to introduce its first comprehensive crypto regulatory framework. A bill was being drafted with the intention to regulate the country’s digital assets industry. This initiative was led by the Union for a Better Future (SBB) of Bosnia and Herzegovina, which formed a committee to draft a bill that would establish a regulatory framework for the country’s digital assets market. The bill was expected to draw references from Croatia and Serbia’s crypto regulations, potentially including tax implications for crypto traders and miners. However, the specific timeline for the discussion and approval of this bill was not clear.

The Central Bank of Bosnia and Herzegovina maintained that the convertible mark, the country’s currency, is the only legal means of payment and does not facilitate the exchange of cryptocurrencies for convertible marks. Nevertheless, the bank stated that there were no plans to limit or prevent the purchase and trading of cryptocurrencies.

In summary, as of 2023, Bosnia and Herzegovina was in a transitional phase regarding cryptocurrency regulation, with significant steps being taken in Republika Srpska and a national bill in the works. The country’s regulatory approach appeared to be cautiously progressive, recognizing the need to adapt to the evolving digital assets market while ensuring compliance with traditional financial standards​​​​.

Add a Comment

Your email address will not be published. Required fields are marked *