San Marino has established a formal legal framework for blockchain and digital asset activities through dedicated legislation, including the creation of a specific regime for digital asset services and "digital asset laboratories" (DALs). San Marino - United States Department of State

The primary regulator for digital assets in San Marino is the Central Bank of the Republic of San Marino, which operates under the authority of the Congress of State and the Great and General Council. San Marino - United States Department of State

Licensing is required for entities engaging in digital asset activity, with a two-stage authorization process: provisional authorization followed by definitive authorization, subject to specific capital and structural requirements. San Marino LOI

As of the most recent data available, no entities have been confirmed to have received definitive authorization as digital asset service providers, indicating the framework remains in early implementation stages. San Marino - United States Department of State

The practical reality is that while San Marino has enacted progressive legislation for blockchain and digital assets, operational implementation, licensing decisions, and enforcement activities are limited, and businesses should anticipate regulatory uncertainty during the early phase of the regime. San Marino - United States Department of State

The Republic of San Marino operates as a multiparty democracy with a parliamentary system; the popularly elected unicameral Great and General Council (parliament) selects two members to serve as captains regent (coheads of state), who preside over the Council and the Congress of State (cabinet). San Marino - United States Department of State

The Congress of State has no more than 10 other members (secretaries of state), selected by the Great and General Council; parliamentary elections are held regularly, with the 2019 elections considered generally free and fair by observers. San Marino - United States Department of State

The Ministry of Foreign Affairs exercises control over administrative functions such as personnel and equipment for security forces, and the courts exercise control over the Gendarmerie when it acts as judicial police; civilian authorities maintained effective control over the security forces. San Marino - United States Department of State

San Marino's legal system provides for an independent judiciary, and the government generally respected judicial independence and impartiality; the law provides for the right to a fair and public trial, without undue delay, and an independent judiciary generally enforced this right. San Marino - United States Department of State

A law approved in March introduced the plea bargain and the review of precautionary measures, and extended in certain circumstances the right of defendants from two to three levels of appeal. San Marino - United States Department of State

Individuals may seek civil remedies for human rights abuses through domestic courts; a law approved in March provided for the mandatory review of precautionary measures, and administrative as well as judicial remedies exist for alleged wrongdoing. San Marino - United States Department of State

After exhausting all routes for appeal in domestic courts, citizens may appeal cases involving alleged government violations of the European Convention on Human Rights to the European Court of Human Rights. San Marino - United States Department of State

The law provides for freedom of expression, including for members of the press and other media, and the government generally respected this right; the country's laws prohibit persons from disseminating, by any means, ideas based on racial superiority or on racial or ethnic hatred or from committing or encouraging others to commit discriminatory acts on the grounds of race, ethnicity, nationality, religion, or sexual orientation. San Marino - United States Department of State

The government did not restrict or disrupt access to the internet or censor online content, and there were no reports that the government monitored private online communications without appropriate legal authority. San Marino - United States Department of State

The law provides for the freedoms of peaceful assembly and association, and for freedom of internal movement, foreign travel, emigration, and repatriation, and the government generally respected these rights. San Marino - United States Department of State

The government cooperated with the Office of the UN High Commissioner for Refugees and other humanitarian organizations in providing protection and assistance to refugees, asylum seekers, stateless persons, and other persons of concern; the government may grant refugee status or asylum by an act of the cabinet. San Marino - United States Department of State

The law provides citizens the ability to choose their government in free and fair periodic elections held by secret ballot and based on universal and equal suffrage; foreigners who have resided in the country for at least 10 years may vote in local elections. San Marino - United States Department of State

The government permitted visits by independent nongovernmental observers and international bodies, including the Council of Europe's Committee for the Prevention of Torture. San Marino - United States Department of State

San Marino's regulatory approach includes provisions for the digital asset sector within its broader legislative framework, but the specific authority responsible for the digital asset regime operates under the oversight of the central bank, which acts in coordination with the national government structure. San Marino LOI

San Marino has enacted specific legislation creating a regime for "digital asset laboratories" (DALs), which are entities authorized to operate within the digital asset and blockchain sector. San Marino LOI

A "digital asset laboratory" is defined as any entity with legal personality that has been authorized to carry out digital asset activity in accordance with the applicable San Marino legislation. San Marino LOI

"Digital asset activity" is defined in the legislation to include the issuance, management, and provision of services related to digital assets, including but not limited to cryptocurrencies, tokens, and other blockchain-based instruments. San Marino LOI

Entities seeking to operate as a digital asset laboratory must obtain authorization from the competent authority; the legislation requires an application process that includes submission of detailed information about the applicant and its intended activities. San Marino LOI

The application for authorization must include information about the legal form of the entity, identification of shareholders and beneficiaries, a description of the business model, and the organizational structure of the proposed DAL. San Marino LOI

The authorization process is structured in two stages: first, provisional authorization is granted once the competent authority verifies that the required documentation is complete and the applicant meets the initial requirements; second, definitive authorization is granted subject to additional conditions. San Marino LOI

Provisional authorization is valid for a period during which the applicant must complete the remaining steps to secure definitive authorization; the competent authority has a defined period from the submission date to issue provisional authorization. San Marino LOI

The competent authority has a defined period from the submission date to receive, examine, and grant the provisional authorization; the date of receipt of the complete application formally starts the authorization process. San Marino LOI

Specific capital requirements are imposed on entities applying for authorization as a digital asset laboratory; these are established in the relevant legislation and must be demonstrated by the applicant as an ongoing condition. San Marino LOI

The legislation stipulates that the competent authority may require additional information or documentation during the authorization process and may set conditions on the authorization. San Marino LOI

The competent authority is the Central Bank of the Republic of San Marino, acting as the supervisory authority for digital asset activities within the framework of the legislation. San Marino LOI

The legislation provides that any company or institution that has been provisionally or definitely authorized as a digital asset laboratory is required to contain the company name or the term "digital asset laboratory" or the acronym "DAL" in its registered name. San Marino LOI

A digital asset laboratory that has been provisionally authorized is required to inform competent authorities at least 15 days prior to commencing any digital asset activity. San Marino LOI

The competent authority must be notified in writing within a specified number of days of the following: changes to the company name, the entity's purpose, changes in the governing body, or the establishment of a new office, branch, or other establishment, whether in San Marino or abroad. San Marino LOI

A digital asset laboratory is required to obtain authorization from the competent authority before establishing any office, branch, or other establishment in another country and before acquiring, increasing, transferring, or decreasing equity investments in companies or entities operating in other countries. San Marino LOI

The competent authority has the power to ascertain compliance with the authorization conditions and to impose measures, including restrictions or revocation of authorization, where the legislation is violated. San Marino LOI

The legislation establishes that any income or proceeds from digital asset activity that have been subject to the compulsory residence on deposit requirement may be used for the acquisition, through the digital asset laboratory, of goods, works, or services of San Marino origin in accordance with the provisions of the legislation. San Marino LOI

As of the latest available data, no public records confirm that any entity has been granted definitive authorization to operate as a digital asset laboratory in San Marino; the framework appears to remain in early implementation. San Marino - United States Department of State

The legislation defines the sanctions applicable to violations of the provisions, including for unauthorized carrying out of digital asset activity, carrying out digital asset activity in violation of applicable laws, and carrying out digital asset activity without the required professional and financial integrity requirements. San Marino LOI

The regulation sets out the procedures for revocation of authorization, requiring the competent authority to revoke authorization when a digital asset laboratory no longer fulfills the conditions for authorization, when it has failed to make use of the authorization within a specified period, or when it has been inactive for a specified period. San Marino LOI

All financial activities in San Marino, including digital asset activities, are subject to the jurisdiction's anti-money laundering and counter-terrorism financing obligations, which require customer due diligence and reporting procedures. San Marino - United States Department of State

The regulatory framework for digital asset laboratories includes requirements for the "professional and financial integrity" of shareholders, administrators, directors, and officers of the authorized entity, which serves as the foundation for fit-and-proper screening. San Marino LOI

Digital asset laboratories must maintain robust governance structures and comply with anti-money laundering requirements in accordance with San Marino's obligations under international standards, including those applicable to the financial sector. San Marino LOI

The competent authority may request information about shareholders, beneficiaries, and the organizational structure of any applicant or authorized entity, which supports the identification of beneficial owners. San Marino LOI

The legislation requires that digital asset laboratories keep records of their transactions and activities, subject to the reporting obligations applicable in the financial sector of San Marino. San Marino LOI

The sanctions regime under the digital asset legislation specifically covers "carrying out digital asset activity in violation of applicable laws," which includes non-compliance with AML/CFT obligations applicable in the jurisdiction. San Marino LOI

The requirements relating to the "professional and financial integrity" of persons involved in the management of a digital asset laboratory require that these individuals meet standards set by the competent authority, which would include KYC-relevant vetting. San Marino LOI

The digital asset laboratory is required to notify the competent authority of any changes to the governing body or to the entity's purpose, which supports the ongoing monitoring of the entity's compliance posture. San Marino LOI

The government of San Marino had mechanisms in place to identify, investigate, and prosecute officials who commit human rights abuses or engage in corruption; the law provides criminal penalties for corruption by officials, and the government generally implemented the law effectively. San Marino - United States Department of State

The law prohibits arbitrary arrest and detention and provides for the right of any person to challenge the lawfulness of his or her arrest or detention in court; warrants based on sufficient evidence and issued by a duly authorized official are required for authorities to apprehend persons other than those caught and arrested during the alleged commission of a crime. San Marino - United States Department of State

The law provides for an apprehended person to be detained in prison, in a treatment facility, or under house arrest, and the person may be ordered to remain in the country while their case is pending trial; authorities did not detain individuals without judicial authorization or in secret. San Marino - United States Department of State

During the reporting period, there were no reports of significant human rights abuses, no reports that the government or its agents committed arbitrary or unlawful killings, and no reports of disappearances by or on behalf of government authorities. San Marino - United States Department of State

The law prohibits torture and other cruel, inhuman, or degrading treatment or punishment, and there were no reports that government officials employed them; there were no allegations of mistreatment reported to authorities. San Marino - United States Department of State

There were no reports that authorities detained or held persons incommunicado, and there were no reports of political prisoners or detainees. San Marino - United States Department of State

There were no reports of government corruption during the year, and there were no confirmed reports during the year that San Marino was a source, destination, or transit country for victims of human trafficking. San Marino - United States Department of State

There were no reports of prosecutions based on the laws prohibiting dissemination of ideas based on racial superiority or racial or ethnic hatred, and there were no reports of antisemitic acts. San Marino - United States Department of State

The legislation on digital asset laboratories establishes a sanctions regime applicable to violations of the digital asset provisions, including sanctions for unauthorized digital asset activity and for carrying out digital asset activity in violation of applicable laws. San Marino LOI

The digital asset legislation provides for the revocation of authorization in cases where a digital asset laboratory no longer fulfills the conditions for authorization, has failed to make use of the authorization within a specified period, or has been inactive for a specified period. San Marino LOI

In October, the trial began of a former head of state for alleged sexual harassment committed in March, when he was still serving in that position; it was still ongoing at year's end. San Marino - United States Department of State

No specific tax guidance for virtual assets has been identified in the available sources for San Marino. San Marino - United States Department of State

The digital asset legislation mandates that any income or proceeds from digital asset activity be subject to a compulsory residence on deposit requirement, which serves as a mechanism for retaining and tracking funds generated through digital asset activities. San Marino LOI

Income or proceeds from digital asset activity that have been subject to the compulsory residence on deposit requirement may be used for the acquisition, through the digital asset laboratory, of goods, works, or services of San Marino origin in accordance with the provisions of the legislation. San Marino LOI

The legislation requires that digital asset laboratories comply with the obligations imposed by the compulsory residence on deposit requirement, which impacts the availability and use of funds derived from digital asset operations. San Marino LOI

The digital asset regulatory framework in San Marino is structured through the digital asset laboratory regime with the Central Bank of the Republic of San Marino serving as the competent authority for authorization and supervision, but the framework is still in its early implementation phase. San Marino LOI

The digital asset legislation imposes a compulsory residence on deposit requirement for income or proceeds from digital asset activity, which may create operational constraints and liquidity implications for businesses processing digital asset transactions. San Marino LOI

Digital asset laboratories must obtain prior authorization from the competent authority before establishing any office, branch, or establishment in another country, and before acquiring, increasing, transferring, or decreasing equity investments in foreign companies, which adds a layer of regulatory approval for entities seeking to expand internationally. San Marino LOI

The legislation requires the digital asset laboratory to apply the compulsory residence on deposit requirement in accordance with the legislation, and the details of this mechanism are not fully outlined in publicly available sources, creating interpretive risk. San Marino LOI

San Marino's legal system provides for civil judicial remedies and administrative remedies for alleged wrongdoing, including human rights abuses, but the application of these mechanisms to the digital asset sector remains untested. San Marino - United States Department of State

The sanctions regime under the digital asset legislation includes sanctions applicable to violations, and the competent authority has the power to impose measures including restrictions or revocation of authorization, but the enforcement parameters and thresholds are not fully defined. San Marino LOI

Businesses face uncertainty regarding the definition of "digital asset activity" and the scope of activities that require authorization, as the precise boundaries are established through the authorization process on a case-by-case basis. San Marino LOI

The regulatory framework requires that income from digital asset activity be subject to the compulsory residence on deposit requirement, and the use of such funds is restricted to acquiring goods, works, or services of San Marino origin, which may limit the ability to repatriate profits or fund foreign operations. San Marino LOI

No tax guidance has been issued specifically for virtual assets, which creates tax uncertainty for digital asset businesses operating in the jurisdiction. San Marino - United States Department of State

San Marino - United States Department of State