The term Fintech has aroused much interest in recent years for investors, financial institutions, academic centers, entrepreneurs, and regulatory entities that seek to provide security to users of technological solutions.
Examples of FinTechs can be found in services such as means of payments and transfers, alternative financing, personal finance and wealth management, business finance, trading of financial assets and stock market, credit risk, back office or digital identity, to mention. to some.
In Nicaragua, in recent years, a few initiatives have been launched for financial inclusion with the aim of promoting the banking of the country, however, specific strategies have not yet been implemented to promote the development of financial inclusion solutions through of FinTech startups or access to financing through capital or alternative methods.
Currently Nicaragua does not have a law that governs fintech companies in a codified manner. Given this scenario, the regulations that apply to Fintech in Nicaragua will depend on what type of company it is. It can be a company that develops technology for financial entities (traditional conception of Fintech), or one that, through technology, provides services comparable to those provided by financial entities.
In this sense, all FinTechs must comply with the implementation and practice of policies for the prevention of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction, as provided in Law No. 977 (only available in Spanish), the which in its art. 32 states that it will regulate -among others- the activity of buying and selling services or currency exchange, as well as the financial technology of payment and virtual asset services.
In this line, the Central Bank of Nicaragua issued in 2020 Resolution No. CD-BCN-XLIV-1-20 (only available in Spanish) “Regulation of financial technology providers of payment services”, which arises with the purpose of regulating the authorization process for financial technology providers of payment services.
Said regulation regulates the following activities: digital wallets, mobile points of sale, electronic money, virtual currencies, purchase, sale and exchange of currency electronically and transfer of funds.
Companies engaged in these economic activities could also be subject to the provisions of the Personal Data Protection Law as well as the Law on Protection of the Rights of Consumers and Users, among others.
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Avil Ramírez Mayorga
CENTRAL LAW in Nicaragua