Is Crypto Legal in Papua New Guinea?
Regulatory Bodies
Bank of Papua New Guinea (BPNG): BPNG has previously issued warnings to the public regarding the risks associated with cryptocurrencies, including volatility, lack of consumer protection, and potential use for illicit activities.
Cryptocurrency Exchanges: Would fall into this gap.
Operating Models
9/9 verdictsCan specific business models operate in Papua New Guinea? Each card answers the operational question for one kind of operator. Curated cells reflect counsel-grade review; AI-generated cells should be confirmed before relying on them.
Conditional · medium burden.
AI · UnreviewedConditional · high burden.
AI · UnreviewedPermitted, no licensing.
AI · UnreviewedConditional · high burden.
AI · UnreviewedConditional · high burden.
AI · UnreviewedConditional · high burden.
AI · UnreviewedConditional · low burden.
AI · UnreviewedConditional · high burden.
AI · UnreviewedConditional · high burden.
AI · UnreviewedPrimary Legislation
| Law / Regulation | Year | Scope |
|---|---|---|
| Papua New Guinea Anti-Money Laundering and Counter Terrorist Financing Act 2015 | 2015 | Example Search Term (you may need to search for the specific PDF): "Papua New Guinea Anti-Money Laundering and Counter Terrorist Financing Act 2015" |
Licensing Requirements
FASU Website: Typically integrated within the BPNG site or linked from it. Information on the AML/CTF Act and reporting requirements can be found there.
Cryptocurrency Exchanges: Would fall into this gap. If a business sought to offer traditional securities exchange services, it would require licenses under the Securities Commission of Papua New Guinea (if established for this purpose) or relevant financial market laws. However, crypto assets are not typically classified as securities under existing PNG law.
Custody Providers: Similarly, no specific license for crypto custody. Traditional trust or financial services licenses might be considered, but these are not designed for digital assets.
Payment Processors: While payment services generally require licensing under BPNG (e.g., National Payment Systems Act 2013), this applies to fiat currency payments and remittances. Processing crypto-to-crypto or crypto-to-fiat payments without being a licensed traditional financial institution operating in fiat would be in a grey area.
Currently, neither a specific registration nor a licensing regime exists for VASPs.
Anticipated Future: Based on FATF recommendations, it is highly probable that PNG will eventually adopt a licensing regime for VASPs. The FATF standards recommend that VASPs be licensed or registered, and subject to effective systems for monitoring and ensuring compliance with AML/CTF requirements. Licensing typically implies a more rigorous pre-approval process and ongoing supervision than simple registration.
Capital Requirements: Financial institutions, including future VASPs, are typically required to maintain a certain level of minimum paid-up capital to demonstrate financial stability and ability to absorb losses. The exact amount would be determined by BPNG based on the scope and risk of services offered.
AML/KYC (Anti-Money Laundering / Know Your Customer): This is the most certain requirement. Future regulations will mandate VASPs to
Identify and verify customers (KYC).
Conduct ongoing customer due diligence.
Monitor transactions for suspicious activity.
Report suspicious transactions to FASU.
Implement robust risk-based AML/CTF programs.
Adhere to the "travel rule" for VA transfers, requiring information sharing between VASPs.
Local Presence: For foreign entities, a local physical presence, a local board of directors, or a local registered company structure is often a requirement for financial licenses.
Management & Governance: Fit and proper tests for directors and senior management, robust governance structures, internal controls, and risk management frameworks (including cybersecurity).
Consumer Protection: Rules around disclosures, clear terms of service, dispute resolution mechanisms, and safeguarding of client assets.
Technology & Security: Requirements for secure systems, data protection, and measures against cyber threats.
Pre-Application Consultation: Discussion with BPNG/FASU.
Submission of Application: Detailed business plan, legal structure, ownership details, management profiles, capital adequacy proof, AML/CTF policies, risk management framework, technology infrastructure details.
Due Diligence & Assessment: BPNG/FASU would review the application, conduct interviews, and assess the suitability of the applicant.
Fit and Proper Checks: For all key personnel.
Approval/Rejection: Decision by the regulator.
Ongoing Supervision: Regular reporting, audits, and compliance checks post-licensing.
Note: Specific advisories on crypto may be found under their "News" or "Media Releases" section, but these often change or are archived. There isn't a dedicated crypto regulation page currently.
Anti-Money Laundering and Counter Terrorist Financing Act 2015
This is the foundational AML/CTF law. While it doesn't explicitly name VASPs, it's the framework FASU operates under. The Act can often be found on government legal websites or linked from FASU/BPNG.
Example Search Term (you may need to search for the specific PDF): "Papua New Guinea Anti-Money Laundering and Counter Terrorist Financing Act 2015"
These are the international standards that PNG, as a member, is expected to implement. Recommendation 15 and its Interpretive Note specifically address VAs and VASPs.
Role: The central bank and primary financial regulator. It has consistently issued public warnings regarding the risks associated with cryptocurrencies. It is responsible for monetary policy, financial stability, and the oversight of the financial system.
Official Website: Bank of Papua New Guinea
Financial Analysis and Supervision Unit (FASU): As the AML/CTF regulator, FASU is responsible for ensuring compliance with the Anti-Money Laundering and Counter Terrorist Financing Act 2015. While VASPs are not explicitly listed as "reporting entities" under this Act yet, the FATF standards imply that they should be.
Role: PNG's Financial Intelligence Unit (FIU), responsible for enforcing Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) laws. As a member of the Asia/Pacific Group on Money Laundering (APG), PNG is obligated to implement FATF recommendations, which include those related to virtual assets. While there may not be specific VASP regulations, FASU would be the body responsible for monitoring suspicious transactions involving virtual assets under existing AML/CTF frameworks.
Official Website (Often linked via BPNG or government sites): While FASU has a presence within the BPNG and government structures, a standalone public website with detailed guidance on crypto is not readily available. Information is usually found in broader government or BPNG publications.
Role: Responsible for regulating the capital markets and securities in PNG. If any virtual asset were deemed to constitute a security under PNG law, the SCPNG would have jurisdiction. However, given the current general stance, this is less immediately relevant than the BPNG's warnings.
Official Website: Securities Commission of Papua New Guinea
Bank of Papua New Guinea (BPNG): BPNG has previously issued warnings to the public regarding the risks associated with cryptocurrencies, including volatility, lack of consumer protection, and potential use for illicit activities. These warnings do not constitute a regulatory framework but indicate a cautious approach.
BPNG Public Notices/Statements (e.g., 2018): While not legislation, these public advisories represent the official regulatory stance. For example, a 2018 public notice from BPNG warned against cryptocurrencies, stating they are not legal tender, are unregulated, and carry significant risks, including price volatility, cybersecurity risks, and use for illicit activities. These warnings have been reiterated over time. Finding a direct permalink to a specific public notice from 2018 can be difficult as BPNG's news archives may not go back that far online, but the content of these warnings is widely reported in news and financial advisories.
Not Legal Tender: The Bank of Papua New Guinea has explicitly stated that cryptocurrencies are not recognized as legal tender in PNG.
Unregulated Environment: There is no specific regulatory framework for cryptocurrency exchanges or trading platforms operating within PNG. This means such platforms are not licensed or supervised by PNG authorities.
High Risk Warnings: The BPNG strongly advises the public against investing in or trading cryptocurrencies due to the high risks involved, including
Potential for fraud, scams, and cyber-attacks.
Lack of recourse or regulatory oversight.
Potential for use in money laundering and terrorist financing.
No Official Ban on Ownership/Trading (but Discouraged): While individuals are not explicitly forbidden from owning or trading cryptocurrencies, they do so at their own risk and outside of any regulatory safety net. Operating an exchange or offering crypto services officially within PNG would likely be challenging without a clear regulatory framework or specific licensing.
AML/CTF Scrutiny: Any large or suspicious transactions involving virtual assets could fall under the purview of the FASU and the AML/CTF Act 2015.
AML/KYC Requirements
Anti-Money Laundering and Counter Terrorist Financing Act 2015 (AML/CTF Act 2015): This Act provides the legal basis for identifying, freezing, and confiscating assets related to money laundering and terrorist financing. It obligates financial institutions and designated non-financial businesses and professions (DNFBPs) to implement AML/CTF measures. While it pre-dates specific crypto regulation, its broad definitions and principles are applied to virtual asset activities where deemed appropriate by regulators.
Note: Finding a publicly accessible, definitive online link for the most current version of PNG legislation can sometimes be challenging. Often, these are available through official government gazettes or legal databases.
Reference: Anti-Money Laundering and Counter Terrorist Financing Act 2015 (No. 4 of 2015). It can often be found on legal databases like PACLII (Pacific Legal Information Institute): http://www.paclii.org/pg/legis/consol_act/amlact2015408/ (This link may lead to an older version, direct legislative publication is preferred).
Terrorism Act 2002 (and subsequent amendments): This Act provides specific provisions related to terrorist financing and the designation of terrorist entities.
Reference: Terrorism Act 2002. Again, often available via PACLII or official sources.
Financial Analysis and Supervision Unit (FASU): As the FIU, FASU issues guidance, receives suspicious transaction reports (STRs), and disseminates information regarding designated persons and entities subject to sanctions.
Reference: FASU Website (part of BPNG): https://www.bankpng.gov.pg/financial-analysis-and-supervision-unit-fasu/
Reference: BPNG Public Statements/Press Releases (monitor for specific crypto guidance): https://www.bankpng.gov.pg/media-releases/
Designated Person/Entity Screening: VASPs must screen their customers (both at onboarding and on an ongoing basis) against the UN Consolidated Sanctions List, which includes individuals and entities designated under various UN sanctions regimes (e.g., terrorism, proliferation, specific country regimes).
Asset Freezing: If a VASP identifies that it holds assets (including virtual assets) belonging to a designated person or entity, it must immediately freeze those assets and report the match to FASU.
Prohibition on Dealing: VASPs are prohibited from making funds or economic resources available to, or for the benefit of, designated persons or entities.
Suspicious Transaction Reporting (STR): Any transaction involving designated persons, or transactions suspected of being related to money laundering or terrorist financing, must be reported to FASU.
Legal Basis: The AML/CTF Act 2015 mandates compliance with international obligations, including UN sanctions. FASU, under this Act, is responsible for disseminating UN sanctions lists to reporting entities and overseeing compliance.
Reference: UN Security Council Sanctions Committees Website (for consolidated lists): https://www.un.org/securitycouncil/sanctions/information
FASU typically publishes advisories when new UN designations are made.
Extraterritorial Reach: OFAC and EU sanctions can have extraterritorial effects, particularly if transactions involve
US persons (citizens, residents, entities, or their foreign branches).
The US financial system (e.g., US dollar clearing).
Correspondent Banking Relationships: PNG financial institutions (and potentially VASPs dealing with them) rely on correspondent banking relationships with US and European banks, which impose their own OFAC/EU compliance requirements.
Reputational Risk: Failing to comply with major international sanctions regimes like OFAC or EU can lead to severe reputational damage, de-risking by international partners, and exclusion from global financial systems.
Obligations: VASPs in PNG that engage in international transactions, particularly those involving US dollars or counterparties in the US/EU, should screen against
OFAC Specially Designated Nationals (SDN) List: https://www.treasury.gov/ofac/downloads/sdn.txt
Who: Any entity offering services related to virtual assets that falls under the scope of "financial institutions" or "designated non-financial businesses and professions" (DNFBPs) as defined by the AML/CTF Act 2015, or is otherwise regulated by BPNG/FASU. Even if not formally regulated as such yet, prudent business practice dictates compliance.
OFAC SDN List (for US nexus/best practice).
EU Consolidated Financial Sanctions List: https://www.sanctionsmap.eu/
Any other relevant sanctions lists from jurisdictions where the VASP operates or has significant business ties.
Onboarding: Before establishing any business relationship or conducting transactions.
Ongoing Monitoring: Regular screening of existing customer bases against updated lists.
Per-Transaction Screening: For high-risk transactions or as part of a risk-based approach.
How: Using reliable screening software or services that keep lists updated and provide auditable results.
Prohibited Jurisdictions: VASPs are generally prohibited from dealing with individuals or entities located in or connected to comprehensively sanctioned jurisdictions (e.g., North Korea, Iran, Syria, Cuba, certain regions of Ukraine/Russia) where those sanctions apply.
High-Risk Jurisdictions: VASPs are expected to apply enhanced due diligence to transactions involving countries identified by FATF or other international bodies as high-risk for money laundering and terrorist financing. FASU may issue guidance on such jurisdictions.
For Individuals: Imprisonment, substantial fines.
For Corporations: Significant monetary penalties (fines) that can be millions of Kina, and potential de-registration or loss of operating license.
For Directors/Officers: Personal liability, including fines and imprisonment.
Terrorism Act 2002: Severe penalties, including long-term imprisonment for financing terrorism.
Reputational Damage: Significant harm to business reputation, making it difficult to operate internationally or attract customers.
De-risking: International financial partners may sever relationships, effectively cutting off access to global financial systems.
Reference: Specific penalty provisions can be found in the respective Acts, particularly Part 9 (Enforcement and Penalties) of the AML/CTF Act 2015.
Implement UN Sanctions: FASU and BPNG are responsible for enforcing UN Security Council Resolutions, which list sanctioned individuals and entities. These lists are applied universally, meaning any assets (fiat or virtual) belonging to these designated persons/entities must be frozen.
Follow FATF Recommendations: PNG's regulatory developments for VASPs will be guided by FATF Recommendation 15 (New Technologies) and Recommendation 6 (Targeted Financial Sanctions), ensuring that VASPs are subject to the same sanctions obligations as traditional financial institutions.
Investment/Security Tokens: Tokens that represent traditional financial instruments such as equity (ownership stakes), debt (loans), or rights to future profits, dividends, or revenue streams from an underlying enterprise. These are almost certainly considered securities.
Asset-Backed Tokens: Tokens representing fractional ownership of real-world assets (e.g., real estate, art, commodities) or financial assets (e.g., shares, bonds) would be considered securities, as they derive their value from the underlying security/asset.
Certain Stablecoins: While a stablecoin designed purely for transactional utility might not be a security, those that offer yield, profit-sharing, or are part of an investment scheme (e.g., lending platforms promising returns) would likely fall under securities regulation.
Prospectus Requirements: Issuers would generally need to prepare and register a detailed prospectus with the SCPNG, providing comprehensive information about the token, the project, the issuer, risks, and financial details, before offering the tokens to the public.
Licensing: Issuers, promoters, and distributors of securities tokens would need to be licensed by the SCPNG to conduct such activities. This includes investment advisors, brokers, and capital market participants.
Corporate Governance & Reporting: Companies issuing security tokens would be subject to ongoing corporate governance, financial reporting, and disclosure obligations as specified by the Capital Market Act.
Exemptions: Traditional securities law exemptions (e.g., private placement exemptions for sophisticated investors, small offering exemptions, or offerings not deemed a "public offering") might apply, but specific guidance for crypto tokens is absent. Issuers would need to seek explicit clarification from the SCPNG.
Regulated Exchanges: Secondary trading would ideally need to occur on a licensed securities exchange (e.g., the PNGX National Stock Exchange, if it were to list digital assets) or through licensed brokers. Operating an unlicensed exchange for security tokens would be illegal.
Market Conduct Rules: All secondary trading would be subject to market conduct rules, including prohibitions against market manipulation, insider trading, and other abusive practices.
AML/CFT: Any platform facilitating secondary trading, regardless of whether it's classified as a securities exchange, would be subject to strict AML/CFT obligations under the Anti-Money Laundering and Counter-Terrorist Financing Act 2015, enforced by the Financial Analysis and Supervision Unit (FASU) and BPNG.
Nascent Market: The cryptocurrency market in PNG is relatively small compared to more developed economies.
Regulatory Caution: PNG's regulators have adopted a stance of extreme caution, primarily issuing warnings rather than engaging in specific enforcement for unlicensed crypto offerings.
Lack of Specific Legislation: Without explicit crypto legislation, enforcement would fall under existing general laws, which may not always be framed as "crypto enforcement."
Focus on Warnings: The BPNG has historically focused on issuing public warnings about the risks associated with cryptocurrencies, including their unregulated nature, price volatility, and potential for scams.
Seek injunctions to prevent further illegal offerings.
Refer cases for criminal prosecution for fraud or unlicensed activities.
The Capital Market Act 1998: This is the primary legislation governing securities and capital markets in PNG.
Direct URL for Act text is often difficult to find and may require navigating government legal databases or PacLII. A search on PacLII for "Capital Market Act Papua New Guinea" should yield results: https://www.paclii.org/pg/legis/
Website: http://www.scpng.gov.pg/ (Check for any news or statements, though specific crypto guidance is unlikely to be found here.)
Bank of Papua New Guinea (BPNG) Circulars and Statements: BPNG, as the central bank, has the authority to regulate financial services. While it has expressed caution regarding cryptocurrencies, it is working towards a regulatory framework for virtual assets. Any entities providing virtual asset services are expected to comply with existing AML/CTF obligations.
Anti-Money Laundering and Counter-Terrorist Financing Act 2015: This act is crucial for any entity dealing with virtual assets, regardless of their securities classification.
A new Papua New Guinea Anti-Money Laundering and Counter-Terrorist Financing regime has been announced by BPNG, establishing a modern legal framework for AML/CFT obligations. NEW Papua New Guinea Anti-Money Laundering and Counter...
The government of Papua New Guinea has enacted new AML/CFT legislation, but no specific instrument number or enactment date is provided in available sources. NEW Papua New Guinea Anti-Money Laundering and Counter...
Papua New Guinea's FATF membership or mutual evaluation status is not documented in the provided sources, and no official FATF assessment for the country is cited.
No dedicated virtual asset or cryptocurrency legislation has been enacted in Papua New Guinea, and no regulatory body has been assigned specific authority over digital assets. Department of Education | Papua New Guinea
The AML/CFT framework in Papua New Guinea is based on the central bank's regulatory role, but no specific regulations or rulebooks addressing virtual assets have been published. NEW Papua New Guinea Anti-Money Laundering and Counter...
No licensing regime exists for cryptocurrency exchanges, virtual asset service providers, or other crypto-related businesses in Papua New Guinea under the current AML/CFT framework. NEW Papua New Guinea Anti-Money Laundering and Counter...
The Bank of Papua New Guinea has not published any licensing criteria, capital requirements, or application procedures for virtual asset service providers. NEW Papua New Guinea Anti-Money Laundering and Counter...
No entity has been licensed to conduct crypto-related activities in Papua New Guinea, and the regulatory pathway for such a license is undefined in available sources. NEW Papua New Guinea Anti-Money Laundering and Counter...
The AML/CFT regime announcement does not specify which activities, if any, related to virtual assets would trigger licensing obligations under the new law. NEW Papua New Guinea Anti-Money Laundering and Counter...
There is zero evidence that any crypto exchange or Web3 business has obtained a license from BPNG, with no licensed entity list or public registry available. NEW Papua New Guinea Anti-Money Laundering and Counter...
The AML/CFT framework places obligations on financial institutions and other reporting entities, but no specific guidance has been issued regarding virtual asset transactions or crypto-related customer due diligence. NEW Papua New Guinea Anti-Money Laundering and Counter...
No publicly available information from BPNG specifies beneficial ownership requirements, PEP screening protocols, or record retention periods applicable to crypto businesses in Papua New Guinea. NEW Papua New Guinea Anti-Money Laundering and Counter...
The new AML/CFT regime is designed to bring Papua New Guinea in line with international standards, but no documentation of its alignment with FATF recommendations for virtual assets is publicly cited. NEW Papua New Guinea Anti-Money Laundering and Counter...
No enforcement actions, fines, penalties, or cases against crypto businesses or individuals related to digital assets in Papua New Guinea are documented in the available sources. NEW Papua New Guinea Anti-Money Laundering and Counter...
No public records exist of BPNG taking regulatory action against any virtual asset service provider operating in Papua New Guinea. NEW Papua New Guinea Anti-Money Laundering and Counter...
Papua New Guinea has no specific regulatory framework for crypto assets, creating significant legal uncertainty for businesses operating in the Web3 space. NEW Papua New Guinea Anti-Money Laundering and Counter...
The new AML/CFT regime does not explicitly address virtual asset service providers, leaving crypto businesses outside the regulated perimeter with no compliance pathway. NEW Papua New Guinea Anti-Money Laundering and Counter...
No risk assessments, guidance papers, or consultation documents have been published by BPNG regarding virtual assets, indicating a low regulatory priority. NEW Papua New Guinea Anti-Money Laundering and Counter...
Businesses face reputational and legal risks operating without clarity on whether crypto activities fall within existing financial services regulations administered by BPNG. NEW Papua New Guinea Anti-Money Laundering and Counter...
The absence of crypto-specific AML/CFT obligations creates a gap where virtual asset platforms could operate without reporting, registration, or oversight obligations, exposing the financial system to money laundering risks. NEW Papua New Guinea Anti-Money Laundering and Counter...
International partners and correspondent banks may impose stricter due diligence on Papua New Guinea-based entities operating in crypto due to the lack of a clear regulatory framework, increasing operational friction. NEW Papua New Guinea Anti-Money Laundering and Counter...
NEW Papua New Guinea Anti-Money Laundering and Counter-Terrorist Financing Regime
Department of Education | Papua New Guinea
Travel Rule
No verified facts yet. 20 unverified fact(s) in explorer
Tax Reporting
Gains from the sale of assets, including virtual assets, are generally not taxable unless they are considered to be
If a gain is determined to fall into one of these categories, it would be treated as ordinary income and subject to the applicable income tax rates for individuals or corporations, rather than a separate CGT rate.
Income from Business Activities: If an individual or entity is regularly trading cryptocurrency, mining crypto as a business, operating a crypto exchange, or providing services in exchange for crypto, the profits derived would be considered assessable income.
Mining Rewards: Cryptocurrency received from mining activities would generally be considered assessable income at its fair market value (in PGK) at the time of receipt.
Staking Rewards/Lending Income: Income derived from staking or lending cryptocurrency would likely be treated as assessable income at its fair market value (in PGK) at the time of receipt.
Airdrops: Depending on the nature and circumstances, an airdrop might be considered assessable income if it's related to a service performed or a pre-existing business activity. Passive, unsolicited airdrops might not be initially taxable, but any subsequent sale could be.
Salary/Wages Paid in Crypto: If an employer pays employees in cryptocurrency, the fair market value of the crypto at the time of payment would be considered assessable income for the employee and subject to Pay-As-You-Go (PAYG) withholding.
Sale of Crypto as Part of a Profit-Making Scheme: Even if not a full-fledged business, if an individual acquires and sells crypto with the clear intention of making a profit, the gain could be treated as ordinary income.
Individuals: Assessable crypto income would be subject to progressive individual income tax rates (currently ranging from 0% to 42% for the highest bracket).
Businesses/Companies: Assessable crypto income would be subject to the corporate income tax rate (generally 30% for resident companies, but can vary for specific sectors).
Holding/HODLing: Simply holding cryptocurrency as an investment, without engaging in active trading or a business, would generally not trigger a taxable event until it is disposed of.
Gains from Passive Investment (Non-Business): If an individual buys and sells crypto as a passive, non-business investment and it's not considered part of a profit-making scheme, any gain might not be taxable due to the absence of CGT. This is a nuanced area and depends heavily on the specific facts and circumstances.
No Specific Crypto GST Rules: There are no specific GST rules for cryptocurrency in PNG.
Likely Treatment: Based on international precedents and the general nature of financial instruments
The supply or exchange of cryptocurrency itself (e.g., buying Bitcoin with PGK, trading Ethereum for Bitcoin) would likely be exempt from GST, similar to the treatment of money, shares, or other financial instruments. This means no GST would be charged on the value of the crypto exchanged.
Services related to cryptocurrency (e.g., fees charged by crypto exchanges, brokerage fees, advisory services) would generally be subject to GST at the standard rate of 10%, provided the service is supplied in PNG by a GST-registered entity.
Mining: The act of mining crypto, if considered a supply of service (e.g., validating transactions), might theoretically be subject to GST, but practically, it's often difficult to apply, especially for solo miners. If a mining operation is a business, its outputs might be considered inputs for the wider crypto ecosystem, and the revenue generated would be subject to income tax.
Individuals who derive assessable income from cryptocurrency (e.g., active trading profits, mining rewards, staking income) must declare this income in their annual income tax returns.
They should keep detailed records of all crypto transactions, including dates, amounts, fair market values (in PGK) at the time of transactions, and the nature of the transaction.
Businesses engaged in crypto-related activities must include all income and expenses related to cryptocurrency in their financial statements and corporate income tax returns.
They must maintain comprehensive records of all crypto transactions, valuations, and any GST collected or paid on related services.
Payroll departments of businesses paying employees in crypto must ensure proper PAYG withholding and reporting based on the PGK fair market value.
Currently, there is no specific legislation or public ruling in Papua New Guinea that exclusively addresses the tax treatment of cryptocurrency or virtual assets.
The tax implications are determined by applying the general provisions of the PNG Income Tax Act, the Goods and Services Tax Act, and relevant tax principles to crypto activities.
The Bank of Papua New Guinea (the central bank) has issued warnings regarding the risks associated with cryptocurrencies but has not provided specific tax guidance.
Income Tax Act 1959 (as amended): This is the primary legislation governing income tax in PNG.
Goods and Services Tax Act 2003 (as amended): This legislation governs GST in PNG.
Note: Direct links to specific sections of legislation are often embedded within the IRC's legal resources or publications section, which can change. It's best to start from the main site and search for the specific Acts.
Custody Requirements
Custody regulation data collection in progress.
Stablecoin Regulation
Most Likely: E-money/Payment Tokens: Given the purpose of stablecoins to maintain a stable value for transactions, they would most likely be classified as a form of e-money or payment tokens under the National Payment System Act 2013 and the National Payment System Regulations 2021.
E-money is typically defined as electronically stored monetary value as represented by a claim on the issuer, which is issued on receipt of funds for the purpose of making payment transactions, and which is accepted by a natural or legal person other than the e-money issuer. Fiat-backed stablecoins would fit this definition well.
Payment Token could also be a relevant classification, referring to an instrument that enables a payment transaction.
Less Likely: Securities: A stablecoin might be classified as a security under the Securities Act 1997 if it grants the holder an ownership interest in an underlying asset, rights to profits, or is structured in a way that represents an investment contract. However, for most fiat-backed stablecoins designed for payments, this classification is less probable than e-money.
If a stablecoin is classified as e-money, the BPNG's framework for e-money issuers would likely apply. This typically requires
1:1 Backing: The issuer must hold an equivalent amount of fiat currency (or highly liquid, low-risk assets) corresponding to the value of e-money in circulation.
Safeguarding and Segregation: These reserves must be held in segregated accounts with a licensed financial institution (e.g., a commercial bank licensed by BPNG) to protect customer funds in case of the issuer's insolvency.
The National Payment System Regulations 2021 are expected to detail these requirements for e-money issuers.
Any entity wishing to issue a stablecoin that falls under the definition of e-money or operates a payment system would need to be licensed and regulated by the Bank of Papua New Guinea.
Under the National Payment System Act 2013, entities providing payment services, including e-money issuance, are typically required to obtain a Payment Service Provider (PSP) license from BPNG. This involves stringent application processes, meeting capital requirements, demonstrating robust governance, risk management, and compliance with Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) regulations.
Consistent with international best practices for e-money and payment tokens, if stablecoins are classified as e-money in PNG, users would likely have redemption rights. This means the issuer would be obligated to redeem the stablecoin for its underlying fiat currency at par value upon request by the holder, subject to reasonable terms and conditions (e.g., fees, notice periods).
Given the general cautious stance of BPNG towards cryptocurrencies and the lack of specific stablecoin legislation, it is highly unlikely that there are any specific rules or a clear regulatory pathway for algorithmic stablecoins.
Due to their inherent volatility and lack of direct fiat or asset backing, algorithmic stablecoins would likely be viewed with extreme skepticism by BPNG, if not implicitly prohibited or strongly discouraged due to the high risks they pose to financial stability and consumer protection. They would not fit the existing e-money framework, which relies on 1:1 backing.
The Bank of Papua New Guinea has indicated its interest in exploring a Central Bank Digital Currency (CBDC). In 2021, BPNG announced it was undertaking feasibility studies into the potential issuance of a CBDC.
Should BPNG issue a CBDC, it would likely serve as the primary digital sovereign currency, potentially diminishing the need for or the regulatory appetite for private stablecoins. A CBDC could offer a secure, regulated digital payment instrument directly backed by the central bank, which might lead BPNG to maintain a strict or even prohibitive stance on private stablecoins to protect the integrity of its monetary system and the financial stability.
National Payment System Act 2013: This is the primary legislation governing payment systems, payment instruments, and e-money in PNG. It grants BPNG the power to license and supervise payment service providers.
Likely source: Bank of Papua New Guinea (BPNG) Official Website: https://www.bankpng.gov.pg/ (Look under "Laws & Regulations" or "Payment Systems")
National Payment System Regulations 2021: These regulations provide detailed rules for implementing the National Payment System Act, including specifics on e-money issuance, licensing, and operational requirements.
Reference: Similarly, these would be published by BPNG.
Central Banking Act 2000: This Act establishes BPNG's mandate, powers, and functions as the central bank, including its role in monetary policy, financial system stability, and supervision.
Anti-Money Laundering and Counter Terrorist Financing Act 2015: Any entity involved in financial services, including stablecoin issuance, would be subject to strict AML/CTF obligations.
Likely source: FASU (Financial Analysis and Supervision Unit) PNG: https://fasu.gov.pg/ or Pacific Islands Forum Secretariat: https://www.forumsec.org/ (for regional legislative resources)
Securities Act 1997: Relevant if a stablecoin were structured as an investment security.
Reference: Administered by the Securities Commission of Papua New Guinea.
Securities Classification
Papua New Guinea does not have a specific legal framework for cryptocurrency or digital assets; the Securities Commission of Papua New Guinea (SCPNG) regulates capital markets under the Securities Act 1997, which does not expressly address digital assets. Securities Commission of Papua New Guinea
The SCPNG only licenses the Port Moresby Stock Exchange and Trustee Companies involved in the Unit Trust Industry; it does not have powers under the current law to issue licenses to other market intermediaries such as Fund Managers, Stock Brokers/Dealers, Investment Advisors, or Underwriters. Papua New Guinea Registry Services
No entity has been licensed to operate a cryptocurrency exchange or digital asset platform in Papua New Guinea, and no specific license type exists for such activities. Securities Commission of Papua New Guinea
The practical reality is that digital asset businesses cannot obtain a securities license under current law, and the SCPNG has limited capacity to regulate or license digital asset activities. Securities Commission of Papua New Guinea
The Securities Commission of Papua New Guinea (SCPNG) is the primary regulator for capital markets in Papua New Guinea; it operates as a Division within the Investment Promotion Authority (IPA). Papua New Guinea Registry Services
The SCPNG's office is located at MRDC HAUS Lvl 2, Champion Parade, Down Town Port Moresby, with general enquiries directed to ask@scpng.gov.pg and landline +675 3212224. Home - Securities Commission of Papua New Guinea
The Bank of Papua New Guinea (BPNG) regulates banking, Savings & Loan Societies, Superannuation Funds, Life Insurance, money markets, and government-issued securities such as Treasury Bills and government bonds. Papua New Guinea Registry Services
The Investment Promotion Authority (IPA) hosts the SCPNG as a Division and provides registry and administrative support for capital market regulation. Papua New Guinea Registry Services
The Securities Act 1997 is the primary legislation governing capital markets in Papua New Guinea and vests the SCPNG with regulatory and enforcement powers and functions. Papua New Guinea Registry Services
The Securities Regulations (1998) supplement the Securities Act 1997 and provide additional regulatory detail for capital market activities. Papua New Guinea Registry Services
The SCPNG publishes Practice Notes and Guidelines under its Laws section, which provide interpretive and operational guidance for market participants. Laws - Securities Commission of Papua New Guinea
Gazettal Notices are published by the SCPNG to formally announce regulatory changes and official decisions. Laws - Securities Commission of Papua New Guinea
The SCPNG regulates primary markets through the issue of shares (both equity and debt) via Initial Public Offerings (IPOs) and monitors secondary markets including compliance listings of companies from foreign stock exchanges. Papua New Guinea Registry Services
The SCPNG regulates the capital markets including both equity and debt securities, private bonds, swaps, subordinate notes, the Unit Trusts industry, and the Fund Management Industry (Non-Superannuation). Papua New Guinea Registry Services
The SCPNG was admitted as a member of the International Organisation of Securities Commissions (IOSCO) in 1997, which is the global standard setter for securities regulations based in Madrid, Spain. Papua New Guinea Registry Services
No FATF or Moneyval status information is available in the source materials. Home - Securities Commission of Papua New Guinea
The Securities Act 1997 empowers the SCPNG to investigate persons and organisations which breach the provisions of the Securities Act 1997, the Securities Regulation 1998, and the Takeovers Code 1998. Papua New Guinea Registry Services
The SCPNG monitors all trades on the Port Moresby Stock Exchange every day to ensure the market functions well and approves listing and business rules of POMSoX, including any new amendments. Papua New Guinea Registry Services
The SCPNG approved POMSoX as a Self Regulatory Organisation, allowing it to set rules and standards for its members and discipline members who breach such rules and standards. Papua New Guinea Registry Services
Under the Securities Act 1997, the SCPNG only licenses the Port Moresby Stock Exchange and Trustee Companies involved in the Unit Trust Industry. Papua New Guinea Registry Services
The SCPNG does not have the powers under the current law to issue licenses to other market intermediaries such as Fund Managers, Stock Brokers/Dealers, Investment Advisors, Underwriters, or similar entities. Papua New Guinea Registry Services
Any entity seeking to operate a digital asset exchange, provide crypto custody, or offer digital asset investment services cannot obtain a license from the SCPNG under the current legal framework. Papua New Guinea Registry Services
As of the latest available information, only two stock brokers operate in Papua New Guinea: Kina Securities and BSP Capital Limited, which are the only members of the Port Moresby Stock Exchange and wholly own the Exchange. Papua New Guinea Registry Services
The SCPNG has granted capital market licenses to several entities, including JMP Securities Limited (renewal granted August 2026), Bilum Heritage Capital Limited (new licenses granted June 2026), Mash Advisory Limited (new license granted May 2026), and Weathermen Capital Advisors Limited (renewal granted April 2026). Home - Securities Commission of Papua New Guinea
Zero cryptocurrency exchanges or digital asset platforms have been licensed by the SCPNG, and none are listed among the SCPNG's Licensed & Approved Entities. Securities Commission of Papua New Guinea
No specific application process, timeline, capital requirements, or structural requirements for digital asset or cryptocurrency licensing are available because no such license exists under current law. Papua New Guinea Registry Services
No minimum capital or monetary thresholds for digital asset licensing are specified in available sources because no digital asset license category exists under the Securities Act 1997. Papua New Guinea Registry Services
The SCPNG maintains a dedicated Anti-Money Laundering & Counter Terrorist Financing (AML/CTF) page under its Licensing section, indicating that AML/CTF compliance is an integral part of market participant obligations. Home - Securities Commission of Papua New Guinea
The SCPNG operates a Secure Reporting Portal, which suggests that reporting obligations are enforced for regulated entities. Home - Securities Commission of Papua New Guinea
The Investment Promotion Authority has a dedicated AML and CFT Compliance section, indicating that AML/CFT obligations extend to entities registered with the IPA. Papua New Guinea Registry Services
Some investigations are currently underway, though the specific nature of these investigations is not disclosed in the available sources. Papua New Guinea Registry Services
FAITH-G Credit Finance and Investing Limited is NOT licensed by the Securities Commission of Papua New Guinea; the SCPNG issued a public notice warning about this entity on May 29, 2026. Home - Securities Commission of Papua New Guinea
The SCPNG warned against fraudulent social media accounts for licensed entities in a public notice issued April 28, 2026, indicating ongoing issues with impersonation of regulated firms. Home - Securities Commission of Papua New Guinea
Court Orders were issued requiring MTSL to respond in 30 days in August 2023, as reported under SCPNG news. Home - Securities Commission of Papua New Guinea
The SCPNG has conducted several investigations and recommendations have been made to relevant agencies to file proceedings against people implicated in breaches of the law; some investigations are currently underway. Papua New Guinea Registry Services
No enforcement actions specific to cryptocurrency or digital asset businesses have been reported, likely because no digital asset businesses are licensed or recognized in Papua New Guinea. Home - Securities Commission of Papua New Guinea
No tax guidance has been issued for virtual assets in Papua New Guinea based on the available sources. Home - Securities Commission of Papua New Guinea
No information is available in the source materials regarding how cryptocurrency gains would be taxed—whether as income tax, capital gains tax, or VAT. Home - Securities Commission of Papua New Guinea
No specific tax treatment for digital assets, cryptocurrency, or related transactions is referenced in the securities regulatory materials provided. Papua New Guinea Registry Services
The sources do not reference the Internal Revenue Commission of Papua New Guinea or any tax authority guidance relevant to digital assets. Home - Securities Commission of Papua New Guinea
The Securities Act 1997 predates the existence of cryptocurrency and digital assets, meaning the law does not expressly contemplate or address digital asset securities, exchanges, or custodians. Papua New Guinea Registry Services
The SCPNG lacks the legal authority to license market intermediaries beyond the Port Moresby Stock Exchange and Trustee Companies in the Unit Trust Industry, which is a significant gap for digital asset businesses. Papua New Guinea Registry Services
There is no definition of "digital asset," "cryptocurrency," "virtual asset," or similar terminology in the current securities legislation. Papua New Guinea Registry Services
The Takeovers Code 1998 was repealed, but no replacement framework has been implemented to address modern market structures including digital assets. Acts
The SCPNG is currently undergoing reforms aimed at building institutional capacity, indicating that the current regulatory capacity is insufficient for comprehensive market oversight. Papua New Guinea Registry Services
The SCPNG's structure as a Division within the Investment Promotion Authority may limit its operational independence and ability to rapidly respond to novel market developments such as digital assets. Papua New Guinea Registry Services
The SCPNG relies on a small number of licensed market participants (only two stock brokers exist), indicating a limited market ecosystem with minimal regulatory supervision capacity. Papua New Guinea Registry Services
Digital asset businesses operating in Papua New Guinea face legal uncertainty because no license category exists for their activities. Papua New Guinea Registry Services
Businesses could be exposed to regulatory action if they engage in activities that fall within the scope of the Securities Act 1997 without appropriate authorization, though the SCPNG's enforcement powers are limited. Papua New Guinea Registry Services
The SCPNG has demonstrated enforcement against unlicensed entities (e.g., FAITH-G Credit Finance and Investing Limited) and warned against fraudulent social media accounts, indicating active monitoring of market participants. Home
Investors in digital assets face significant risks due to the absence of regulatory protections, and the SCPNG's investor protection mandate is limited to traditional capital market products. Home
The SCPNG maintains a Market Monitoring Dashboard for traditional securities but no equivalent capability for digital asset markets. Home
Formal bilateral agreements with international regulators exist (including a bilateral MOU with the New Zealand Financial Markets Authority signed in 1998), but these are unlikely to cover digital asset regulatory cooperation given their age.
The regulatory response to digital assets in Papua New Guinea is essentially nonexistent, creating a legal vacuum that exposes businesses and investors to significant risk. Home
Papua New Guinea Registry Services
Sanctions & Restrictions
PNG Sanctions Secretariat: Responsible for implementing sanctions and combating terrorist financing. Part of the Department of PM&NEC under OSCA.
National Coordinating Committee (NCC) for Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF): Oversees AML/CTF compliance across PNG’s financial sector.
Membership includes the PNG Sanctions Secretariat.
Anti-Money Laundering and Counter-Terrorist Financing Act 2015 (AMLCFTA): Comprehensive legislation addressing AML/CTF measures, criminalizing money laundering and terrorist financing activities.
United Nations Financial Sanctions Act 2015: Mandates the establishment of the Sanctions Secretariat within PM&NEC to implement UN sanctions lists and regulate dealings with designated persons or entities.
Applications for financial services licenses (including those potentially involving digital assets) are processed by the Bank of Papua New Guinea.
The application timeline typically ranges from several months, depending on regulatory review and compliance verification.
Papua New Guinea Sanctions Secretariat
Laws – Papua New Guinea Sanctions Secretariat
Circular – BPNG-FASU-002/2023 | Bank of PNG
Enforcement Actions
Regulator Name: Bank of Papua New Guinea (BPNG)
Entity Targeted: General public, financial institutions, individuals considering or engaging with cryptocurrencies. Violation Type (Implied): Engaging in unauthorized financial activities; lack of consumer protection for speculative investments; potential for financial crime. Penalty Amount: N/A (This was a public warning, not an enforcement action with a specific penalty).
Date: August 12, 2021 (The most prominent public warning in recent years)
Outcome: The BPNG clarified that cryptocurrencies are not legal tender in PNG. They highlighted risks such as volatility, lack of regulation, potential for scams, and use in illicit activities. The statement advised the public to exercise caution and warned that losses would not be protected by PNG laws. It also indicated the BPNG's intention to develop appropriate regulations for digital assets in the future. This warning has generally underpinned the BPNG's ongoing stance.
Bank of Papua New Guinea - Public Notice on Digital Currencies, Virtual Assets and Cryptocurrencies (PDF)
Business Advantage PNG - PNG central bank issues warning on cryptocurrencies
Entity Targeted: General public, potential market participants, financial sector. Violation Type (Implied): Operating without appropriate licensing once a framework is established; engaging in risky or illicit activities. Penalty Amount: N/A (Ongoing policy development and warnings, no specific penalties).
Date: Ongoing, with updates or reiterations appearing in various reports and speeches (e.g., annual reports, statements to media).
Statements are often general and not tied to a single "action" URL, but reflect ongoing policy. For example, the BPNG's Annual Reports or public addresses often touch upon these topics. The above 2021 notice remains the foundational document. News articles frequently refer back to this stance
PNG Central Bank: A cautious approach towards cryptocurrency - The PNG Bulletin (Refers to BPNG's ongoing stance in 2022)
BPNG Governor's Speeches and Statements (often contain updates on regulatory priorities) (While not a direct enforcement action, this is where updates on regulatory intent would be found.)
Legal Basis: The AML/CTF Act 2015 mandates compliance with international obligations, including UN sanctions. FASU, under this Act, is responsible for disseminating UN sanctions lists to reporting entities and overseeing compliance.
Research & Articles
Regulatory Forecast
high confidenceLikely enforcement action expected around 2029-01-27
Based on 21 historical regulatory events for Papua New Guinea, averaging every 930 days, with increasing regulatory activity.
This profile is maintained by AI research workers and updated regularly. Connect via MCP for programmatic access.