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 the Dominican Republic, 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 Dominican Republic
Monetary and Financial Law No. 183-02
Regulates the national financial system and grants the Central Bank the exclusive power over the issuance and control of the national currency. This law does not contemplate or recognize cryptocurrencies or virtual assets as valid financial instruments, and prohibits regulated entities from operating with these assets within the country’s payment system.
Securities Market Law No. 249-17
This law regulates the public offering of securities and grants powers to the Securities Market Superintendency (SIMV) to authorize financial instruments. If a digital token has the nature of a negotiable security, it must comply with the requirements of authorization, disclosure and registration in the Securities Market Registry.
Law 155-17 against Money Laundering and Financing of Terrorism
It incorporates references to virtual currencies in the context of financial crime prevention, imposing reporting and due diligence obligations on regulated entities that may be involved in transactions with digital assets. However, it does not establish a specific supervisory or licensing regime for VASPs.
Tokenization makes it possible to digitally represent real-world assets through blockchain, but for it to have legal value, it is essential that there is a regulatory framework that recognizes this operation. The Dominican Republic adopts its own approach, establishing specific rules for the issuance, custody or trading of tokens. In this block we explain how asset tokenization is regulated from a legal point of view, taking an advanced jurisdiction such as the Dominican Republic as an example.
Regulation of asset tokenization in Dominican Republic
In the Dominican Republic, the tokenization of financial and non-financial assets lacks a specific legal framework or detailed regulatory guidelines. Current legislation does not recognize the legal validity of tokens or regulate their issuance, marketing or custody, so any tokenization initiative is carried out under the general regime of private law and civil regulations, with no guarantees of protection for investors.
Financial authorities have adopted a restrictive stance, prohibiting regulated entities from operating with digital assets and warning users about the risks of operating in unsupervised markets. Law 155-17 imposes general anti-money laundering obligations, applicable to any suspicious operation, but does not establish specific requirements for tokenization projects.
Currently, there are no regulatory sandboxes, DLT pilot regimes or examples of authorized institutional projects, and activity related to blockchain and digital assets remains in a state of regulatory vacuum.
Central Bank of the Dominican Republic (BCRD)
The BCRD is the monetary authority responsible for exchange rate policy and the stability of the national financial system. It has issued communiqués warning that cryptocurrencies and digital assets are not legal tender, nor do they have state backing. They are not authorized to be used by regulated financial institutions within the national payment system.
Superintendency of the Securities Market of the Dominican Republic (SIMV)
The SIMV supervises the securities market and ensures the protection of investors in traditional financial instruments. It has warned that virtual assets, including cryptocurrencies and unregistered tokens, are not regulated or supervised by this agency, so those who operate or invest in these instruments do not have the legal protection of the Dominican framework.
Financial Analysis Unit (UAF)
It is the entity in charge of the prevention of money laundering and terrorist financing. Although there is no specific regime for cryptoassets, the UAF applies the law to regulated entities that may be involved in transactions with digital assets, requiring suspicious transaction reports and the application of due diligence controls.
Launching a business based on digital assets 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 complies with transparency and fraud prevention standards. In this section we explore what licenses are usually required and what compliance criteria blockchain companies operating in the Dominican Republic must follow.
What licenses and requirements are needed to operate with cryptoassets in the Dominican Republic?
If a cryptoasset meets the characteristics of a negotiable security under the Securities Market Law, the issuer must obtain prior authorization from the SIMV. This implies complying with the requirements of public offering, filing of prospectus, registration of issuers, designation of legal representatives and subjection to the transparency and governance regulations applicable to traditional securities. Operating without this authorization may lead to penalties.
AML/KYC Compliance
Although there are no sectorial requirements for cryptoassets, individuals and companies that carry out activities susceptible of being linked to money laundering or terrorist financing must comply with the law and general prevention regulations. This implies the obligation to report suspicious transactions, apply due diligence controls and cooperate with the UAF in case of investigations.
Prohibition for regulated financial entities
Financial and payment institutions regulated by the BCRD and the Superintendencia del Mercado de Valores are prohibited from operating, brokering, safekeeping or trading cryptoassets in any modality. Failure to comply with this prohibition may lead to administrative and criminal sanctions in accordance with the Monetary and Financial Law and the sectorial regulations in force.
Are you exploring developing your blockchain project in the Dominican Republic?
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 the Dominican Republic 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.