The adoption of blockchain technology and asset tokenization is advancing at a rapid pace, but the real engine driving its global development is the existence of a clear, consistent and innovation-friendly legal framework.
Some countries have already established themselves as regulatory benchmarks, establishing specific rules for cryptoassets, DLT infrastructures and token issuance with legal backing. In this article we show you relevant information about blockchain regulation in Andorra, which you can use as a guide if you are looking to operate internationally or evaluate different strategic locations.
Current legislation on blockchain and virtual assets in Andorra
Law 24/2022 on Digital Assets
It comprehensively regulates the issuance, custody, exchange and supervision of digital assets and cryptocurrencies in Andorra. This regulation defines the taxonomy of digital assets, establishes licensing requirements, advertising procedures and token categorization, and reinforces investor protection and transparency in the use of DLT and blockchain technologies.
Decree 478/2022, Regulation for the development of the requirements to act as a digital overseer.
Develops the figure of the digital overseer, establishing its functions, suitability requirements and oversight obligations on issuers, custodians and platforms of digital assets. The digital overseer may be either an individual or a legal entity. In the case of a natural person, he/she must be a lawyer or economist registered in Andorra. In the case of a legal entity, it must appoint a natural person representative who meets the aforementioned membership requirements. In both cases, the representative acts as guarantor of compliance with the AFA. The regulations also detail the disciplinary and sanctioning regime.
Law 14/2017 on the Prevention of and Fight against Money Laundering (as amended by Law 37/2021).
The base law on AML/CFT matters is Law 14/2017, of June 22, on the prevention and fight against money or securities laundering and the financing of terrorism, modified in a relevant way for digital assets by Law 37/2021, of December 16. This amendment expressly incorporated VASPs as regulated entities: exchange platforms, custodians, transfer services and issuers of virtual assets. VASPs must apply KYC procedures, identify beneficial owners and report suspicious transactions to UIFAND. The law incorporates international FATF guidelines and the commitments derived from Andorra’s Monetary Agreement with the EU.
Regulation of asset tokenization in Andorra
Asset tokenization in Andorra is mainly regulated by Law 24/2022, which provides an advanced and specific legal framework for the digital representation of financial and non-financial assets through distributed registry and blockchain technologies.
The law establishes clear procedures for the issuance of utility, security and stablecoins tokens, as well as for custody, exchange and trading on authorized platforms. Issuers and operators must obtain a license granted by the Andorran Financial Authority (AFA), meet capital requirements, insurance and appoint a registered digital overseer, responsible for regulatory interlocution and supervision. The regulation contemplates the possible creation of market infrastructures such as the Andorra Digital Exchange, and regulates the publicity, governance and transparency of tokenized projects.
For non-financial assets, tokenization is analyzed on a case-by-case basis, in addition to the obligations for the prevention of money laundering and terrorist financing according to Law 14/2017 as amended by Law 37/2021, under the supervision of UIFAND. Likewise, Andorra has since 2023 a regulation for controlled testing environments (sandbox), although it does not participate in the European DLT pilot scheme.
Regulatory bodies and authorities for digital assets in Andorra
Andorran Financial Authority (AFA)
Supervises financial markets and is the competent body to authorize and oversee activities related to digital assets in the country. It supervises token issuers, trading platforms, custodians and entities offering financial services linked to blockchain. It evaluates applications for authorization and may impose sanctions.
Digital Overseer Registration
Mandatory figure who acts as an authorized representative before the AFA for each digital asset project. It can be a legal entity, lawyer or economist registered in Andorra and meet requirements of experience, solvency and tax residency. Its functions include the interlocution between the company and the AFA, supervision, legal consultancy and incident reporting.
Andorran Financial Intelligence Unit (UIFAND)
UIFAND is Andorra’s financial intelligence unit and exercises functions of reception, analysis and transmission of relevant information regarding the prevention of money laundering and terrorist financing. It supervises compliance with AML/CFT obligations by digital asset service providers as obliged subjects under Law 14/2017 (as amended by Law 37/2021). Operators must implement KYC policies, monitor operations and report directly to UIFAND any suspicious activity.
Authorization and operational registration of VASPs is the responsibility of the AFA; UIFAND acts as AML compliance and financial intelligence supervisor. Launching a digital asset-based business requires more than just technology: it is also necessary to comply with legal requirements such as licensing, registration and regulatory obligations. These conditions ensure that the business model is viable and sustainable over time, and that it meets transparency and fraud prevention standards. In this section we explore what licenses are usually required and what compliance criteria blockchain companies operating in Andorra must follow.
What licenses and requirements are needed to trade cryptoassets in Andorra?
Authorization according to Law 24/2022
Any legal entity wishing to issue, hold or trade digital assets in Andorra must obtain express authorization from the AFA. It is required to analyze the business model, the technological systems, the suitability and solvency of the administrators, the financial capacity, the minimum capital and the contracting of a civil liability insurance. In addition, it is mandatory to appoint a registered digital overseer as an authorized representative before the AFA.
AML/CFT compliance under Law 14/2017.
All digital asset operators are obliged subjects under Law 14/2017 (as amended by Law 37/2021) and must comply with anti-money laundering and terrorist financing prevention regulations supervised by UIFAND. This involves customer verification policies (KYC), identification of beneficial owners, risk management, internal training and reporting of suspicious transactions directly to UIFAND. Operational registration and authorization is the responsibility of the AFA; failure to comply with AML obligations may result in sanctions from both the AFA and UIFAND in their respective areas of competence.
Technical requirements and legal documentation
Token issuers must submit to the AFA detailed documentation on the operation of the digital asset, its legal link to the underlying, issuance conditions, security of technological systems, auditability of the distributed registry and protection against operational failures. All these requirements are evaluated by the AFA before authorizing the project, and the digital overseer supervises regulatory compliance.
Are you exploring developing your blockchain project in Andorra?
At Metlabs we help companies like yours and offer comprehensive support in the development of blockchain projects and tokenization of assets such as real estate, carbon credits, commodities, intellectual property, financial instruments, franchises and more, fully aligned with blockchain regulation in Andorra and international regulatory standards.
Contact us and find out how we can help you meeting all your business model needs, from technical validation and structuring to design, development and implementation of custom blockchain solutions, ready to scale from day one.