Papua New Guinea -- Cross Border Regulatory Overview

The Financial Services Authority (FSA) is the primary financial regulator in PNG, overseeing banking, insurance, and securities markets. However, it has not issued specific guidance or regulations concerning cryptocurrencies as of 2025–2026 Cross-Border Inequality between Indonesian Papua and Papua New Guinea: Causes and Solutions.

No dedicated agency such as a Central Bank Digital Currency (CBDC) unit or Virtual Asset Regulator exists.

The Financial Services Act (Cap 226) governs financial institutions but does not mention virtual assets explicitly Border management policy implementation and cross-border trade: The case of Sota, Indonesia–Papua New Guinea.

The Anti-Money Laundering and Countering Financing of Terrorism Act (AMLAFCOTA) applies broadly to “financial services” but lacks explicit definitions for digital assets, leaving their classification ambiguous Cross-border trade in Saratoga fingerlings from the Bensbach River, south-west Papua New Guinea.

PNG is a member of the Financial Action Task Force (FATF), adhering to its recommendations on virtual asset service providers (VASPs). However, implementation within PNG remains minimal due to the absence of targeted regulations .

Entities Requiring License: No specific license is mandated for engaging in cryptocurrency activities under current PNG law.

Activities Requiring Licensing: None identified; however, any operation that falls under existing financial services (e.g., crypto exchanges offering fiat on‑ramps/off‑ramps) would be subject to general banking or money transmission licensing by the FSA, which is not clearly applicable to digital assets Financial sector improvements in Papua New Guinea | Bank for....

Capital Requirements: Not defined for virtual asset service providers. Existing capital thresholds apply only to licensed banks and money remitters (e.g., minimum net worth of K10 million for banks under the Banking Act), but these do not extend to crypto activities per se .

Application Process & Timeline: No formal application process exists for cryptocurrency-related services; prospective entities would need to seek a general financial service license, which involves extensive documentation and approval from the FSA. The timeline is undefined due to regulatory gaps Cross-Border Inequality between Indonesian Papua and Papua New Guinea: Causes and Solutions.

Structural Requirements: None specifically outlined for virtual asset businesses.

CDD (Customer Due Diligence): The FSA’s existing AML/CFT framework imposes CDD obligations on “financial institutions” and “money transmission businesses.” Crypto service providers would be subject to these only if classified as such, which is currently undefined Border management policy implementation and cross-border trade: The case of Sota, Indonesia–Papua New Guinea.

EDD (Enhanced Due Diligence): Required for high-risk customers or transactions; again, the classification of crypto entities remains ambiguous .

STR Reporting (Suspicious Transaction Reports): Mandatory for any financial institution detecting suspicious activities; however, enforcement mechanisms are unclear for unlicensed crypto operators .

Record Retention: No specific retention periods are prescribed for digital asset records in PNG law. Financial institutions retain records per existing guidelines (typically 5 years), but this does not directly address blockchain transaction logs .

Beneficial Ownership & PEP Screening: The FSA mandates disclosure of beneficial ownership for financial entities, yet no explicit guidance applies to VASPs operating without a license .

Cross-Border Inequality between Indonesian Papua and Papua New Guinea: Causes and Solutions

Border management policy implementation and cross-border trade: The case of Sota, Indonesia–Papua New Guinea

Cross-border trade in Saratoga fingerlings from the Bensbach River, south-west Papua New Guinea

The current regulatory environment in Papua New Guinea (PNG) regarding cryptocurrencies and digital assets is largely undefined, posing significant challenges for cross-border transactions.

PNG lacks specific legislation that directly addresses cryptocurrencies, leaving a regulatory gap that could be exploited by illicit financial activities.

The absence of Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations for digital assets in PNG undermines efforts to prevent financial crimes.

Due to the lack of clear regulatory frameworks, enforcement actions against non-compliant cryptocurrency activities in PNG are minimal and inconsistently applied.

PNG has not yet issued clear guidelines on the taxation of cryptocurrency transactions, leading to uncertainty for both businesses and individuals engaging in digital asset activities.

The primary risk associated with the current regulatory landscape is the potential for increased illicit financial activities, such as money laundering and terrorism financing, due to insufficient oversight.

Pacific news in brief for July 18 | RNZ