Romania has become the latest country to institute a regulatory process expressly targeted at cryptocurrencies and digital currencies. A draft of an Emergency Ordinance published by the Romanian Ministry of Finance sets out the conditions and requirements that must be met by an issuer of electronic money in the Eastern European country.
According to the draft bill, the issuer must have a minimum of EUR 350,000 worth of share capital, and every one of its members must be individually vetted and approved by the National Bank of Romania (BNR). Ostensibly to tackle organized crime, the proposed vetting measures will include full verification of individual tax payment history and personal legal records, according to a local report.
The draft makes no direct mention of ‘cryptocurrencies’, using only the term ‘electronic money’. It further states that electronic money issuance may only be carried out by credit institutions, electronic money institutions, the European Central Bank (ECB) and local or regional public authorities.
It is specified that in order to be recognized as an electronic money institution’, organizations must be legally authorized to do so under Romanian law. In other words, for cryptocurrency companies to operate legally in Romania, they must register under and be supervised by the BNR, which also provides the regulatory authorization to issue electronic money.
The draft also states that authorizations for electronic money issuance are valid for 12 months from the date of issue. In the event that the company does not commence operations in that time, the authorization will be voided.
In what may be an ominous clause targeting cryptocurrencies, it also states that authorization will also be withdrawn if the money issuance activity does not take place on Romanian territory or if authorization was given based on false information.
Emphasis on Structure
The draft states that the BNR will only grant electronic money licenses if it is convinced of the provider’s ability to demonstrate a clear organizational structure, corporate governance, effective risk management policies and solid accounting and administration practices. If a company wishes to obtain approval to issue electronic money, there is a stipulated three month waiting period for authorities to carry out checks and due diligence.
What this potentially means for cryptocurrencies and crypto companies in Romania is that the regulator wishes to assume complete control over all money-issuance activities in the country. In other words, of they wish to engage the Romanian market, they will have to go through the BNR and the Ministry of Finance. If the emergency ordinance bill scales through, the BNR will effectively gain sole ownership of the electronic money space in Romania.
The draft’s wording describes ‘Electronic money’ as “monetary value stored electronically, including magnetic, representing a claim on the issuer issued on receipt of funds for the purpose of performing payment transactions and which is accepted by a person other than the issuer of electronic money.”
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