Stablecoin issuer / redeemer in Lesotho

E-money/Payment Tokens: This is the most likely classification for fiat-pegged stablecoins intended primarily for payments.

Lesotho has no National Payment System Act 2020: payment systems are governed by the Payment Systems Act 2014 (Act No. 11 of 2014, gazetted 12 September 2014) and the Payment Systems (Issuers of Electronic Payment Instruments) Regulations 2017 (Legal Notice No. 30 of 2017, gazetted 31 March 2017), neither of which mentions virtual assets, cryptocurrency or stablecoins, and Lesotho imposes no stablecoin redemption right, reserve-attestation duty or issuer authorisation.

Definition: Under such regulations, electronic money typically refers to electronically stored monetary value represented by a claim on the issuer, issued on receipt of funds for the purpose of making payment transactions, and accepted by a natural or legal person other than the electronic money issuer. A fiat-pegged stablecoin could fit this description if issued by a regulated entity.

The Central Bank of Lesotho's legislation index lists no National Payment System Act 2020 and no stablecoin, virtual-asset or crypto instrument of any kind; the operative payments statute is the Payment Systems Act 2014, and the separate monetary fact is that Lesotho issues its own currency, the loti, pegged at par to the rand inside the Common Monetary Area, which is a currency arrangement and not a stablecoin rule.

Lesotho's e-money backing rules are detailed and public: the Payment Systems (Issuers of Electronic Payment Instruments) Regulations 2017 (Legal Notice No. 30 of 2017), made under sections 15, 16 and 35 of the Payment Systems Act 2014, require an issuer to deposit collected funds into a trust account at a bank licensed in Lesotho (regulation 35(1)) and require, under Schedule 4 item 3(a), that "the balance on the Trust Account shall at all times be equal to the outstanding (unclaimed) balance of all e-money holders". Those regulations never use the words cryptocurrency, virtual currency or digital asset, and no Lesotho instrument extends them to stablecoins.

Lesotho has no National Payment System Act 2020. Issuers of electronic payment instruments are licensed by the Central Bank of Lesotho under the Payment Systems Act 2014 and the Payment Systems (Issuers of Electronic Payment Instruments) Regulations 2017 (Legal Notice No. 30 of 2017), whose regulation 5 provides that "a company shall not conduct the business of issuer of electronic payment instruments unless it is licensed under Part III or as a financial institution under the Financial Institutions Act, 2012", and whose regulation 16 and Schedule 2 set core capital at M500,000. Neither instrument mentions cryptocurrency or stablecoins.

If classified as E-money: E-money regulations typically mandate clear redemption rights for holders, allowing them to redeem their e-money for fiat currency at par value at any time, subject to reasonable fees.

Lesotho imposes no reserve, backing or segregation duty on stablecoin issuers, because it has no stablecoin instrument of any kind: the Central Bank of Lesotho legislation index carries no virtual-asset, crypto-asset or stablecoin instrument among its roughly seventy items, a site search for "stablecoin" returns zero results, and the Bank's press statement of 20 May 2024 records that "cryptocurrencies do not fall under the purview of the regulatory scope of the Central Bank of Lesotho".

No Lesotho instrument confers a redemption right against a stablecoin issuer. The only statutory par-value redemption duty in Lesotho is regulation 31 of the Payment Systems (Issuers of Electronic Payment Instruments) Regulations 2017, which obliges a licensed e-money issuer to "redeem at par value, the monetary value of the e-money held" within 5 days of the claim and without fees, and no crypto-asset or stablecoin issuer holds that licence.

Lesotho's second-round mutual evaluation, on-site 21 November to 2 December 2022 and adopted by ESAAMLG in September 2023, rates Recommendation 15 (New technologies) Non-Compliant and records that "Lesotho does not have a legal and institutional framework to allow VAs and VASPs activities to be carried out" and that the authorities "have not taken any regulatory measures"; no virtual-asset provisions exist at all, and no follow-up re-rating has been published as at 20 August 2026.

Lesotho's anti-money-laundering law contains no virtual-asset category: the Money Laundering and Proceeds of Crime Act 2008 defines no virtual asset and imposes no obligation on virtual-asset service providers, the most recent Schedule amendment (Legal Notice No. 69 of 2024, gazetted 25 June 2024 under s. 112) added only safekeeping and administration of cash or liquid securities, and ESAAMLG rated Lesotho Non-Compliant on Recommendation 15 in September 2023.

Lesotho has enacted no virtual-asset statute and operates no virtual-asset service provider licence or registration: the Central Bank of Lesotho's legislation index carries no virtual-asset, crypto-asset or digital-asset instrument, and the September 2023 ESAAMLG mutual evaluation records that Lesotho 'does not have a legal and institutional framework to allow VAs and VASPs activities to be carried out'.

The Central Bank of Lesotho's published position on cryptocurrency consists of two warnings, issued 9 November 2017 and 20 May 2024; the 2024 statement places cryptocurrencies outside the Bank's regulatory perimeter rather than prohibiting them, and Lesotho has never operated a regulatory sandbox or any crypto authorisation pathway.

Lesotho's Money Laundering and Proceeds of Crime Act 2008 (Act 4 of 2008) binds only the accountable institutions listed in its Schedule 1, and the most recent amendment - Legal Notice No. 69 of 2024, gazetted Tuesday 25 June 2024 under section 112 - inserts a single new entry, 'person conducting safekeeping and administration of cash or liquid securities activities on behalf of other persons', so virtual-asset service providers are not accountable institutions in Lesotho and carry no AML/CFT obligation.

Lesotho is a member of the Eastern and Southern Africa Anti-Money Laundering Group, and its second-round mutual evaluation - on-site 21 November to 2 December 2022, adopted September 2023 - rates Lesotho Non-Compliant on FATF Recommendation 15 on new technologies; the FATF standards bind Lesotho only politically through ESAAMLG and have not been transposed into any domestic virtual-asset obligation.

The Money Laundering and Proceeds of Crime Act 2008 (Act 4 of 2008), as amended, is Lesotho's principal AML/CFT statute, and its section 14 establishes the Financial Intelligence Unit as a juristic person responsible to the Minister; the body is styled simply 'Financial Intelligence Unit', without a country prefix.

Lesotho imposes no local-presence, local-management or domestic-incorporation requirement on virtual-asset service providers, because it licenses no such providers; presence and management requirements arise only on licensing under the Financial Institutions Act 2012 (Act No. 3 of 2012), which governs deposit-taking and non-deposit-taking institutions carrying on financial activities stipulated in their licence.

Lesotho prescribes no minimum capital for virtual-asset service providers, because no VASP licence exists to attach capital to; minimum cash capital is imposed only on institutions licensed under the Financial Institutions Act 2012 (Act No. 3 of 2012), whose section 9 requires an applicant to fulfil the minimum cash capital set in the Second Schedule, with section 22 requiring that capital be maintained unimpaired.

The Money Laundering and Proceeds of Crime Act, 2008 (Act No. 4 of 2008) is Lesotho's foundational AML statute, but virtual asset service providers are not accountable institutions under its Schedule 1: the most recent Schedule amendment, Legal Notice No. 69 of 2024 published 25 June 2024 under section 112 of that Act, inserts only a person conducting safekeeping and administration of cash or liquid securities, and no virtual-asset category has ever been added.

Lesotho has no Financial Intelligence Act 2011: the Financial Intelligence Unit is established by section 14 of the Money Laundering and Proceeds of Crime Act, 2008 as a juristic person responsible to the Minister, suspicious transaction reporting arises under section 18 of that Act and the tipping-off prohibition under section 24(1).

Evidence fact ls.aml.identification-and-verification not found (may have been renamed).

Ongoing Monitoring: Continuously monitoring the business relationship, including scrutiny of transactions undertaken throughout the course of the relationship, to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Source of Funds/Wealth: Given the inherent risks of virtual assets, VASPs are expected to obtain information on the source of funds or source of wealth, especially for large transactions or high-risk customers.

Enhanced Due Diligence (EDD): Required for high-risk situations, which typically include:

Report Suspicious Transactions: Report to the FIU any transaction (or attempted transaction) where they have reasonable grounds to suspect that it may involve the proceeds of criminal activity, or relates to money laundering or terrorist financing. This includes suspicious activities in virtual assets.

Section 17(4) of the Money Laundering and Proceeds of Crime Act, 2008 requires records to be kept for at least five years from the date the relevant business or transaction was completed, but that duty binds only the accountable institutions listed in Schedule 1 of the Act, a list that contains no virtual asset service provider category after Legal Notice No. 69 of 2024.

Lesotho's Financial Intelligence Unit is established by section 14 of the Money Laundering and Proceeds of Crime Act, 2008 as a juristic person responsible to the Minister, and receives, analyses and disseminates suspicious transaction reports from the accountable institutions listed in Schedule 1 of that Act, which contains no virtual asset service provider category and gives the Unit no VASP oversight.

Lesotho operates no cryptocurrency custody licence and no virtual-asset licensing regime of any kind: the Central Bank of Lesotho legislation index lists no virtual-asset instrument, the Bank's press statement of 20 May 2024 places cryptocurrencies outside its regulatory perimeter, and the ESAAMLG mutual evaluation adopted in September 2023 rated Recommendation 15 Non-Compliant.

Lesotho imposes no client-asset segregation duty on digital-asset custodians: no virtual-asset statute exists, the Financial Institutions Act 2012 sets no safekeeping or client-asset rule, and Legal Notice No. 69 of 2024 extended the AML Schedule only to a person conducting safekeeping and administration of cash or liquid securities, an entry that reaches neither crypto-assets nor custodians of them.

A resident taxpayer in Lesotho is taxed on income from all geographical sources under s. 17(2) of the Income Tax Order 1993, while a non-resident is taxed on Lesotho-source income only under s. 17(3); Revenue Services Lesotho has published no crypto-asset tax guidance and no crypto-specific declaration duty exists.

Income tax returns in Lesotho are filed with Revenue Services Lesotho, the successor to the Lesotho Revenue Authority, and s. 128(1) of the Income Tax Order 1993 requires every taxpayer and every nominated officer of a partnership or trust to file a return of income for each year of assessment not later than the last day of the third month following the end of that year, subject to the exceptions in s. 129.