Romania Unleashes Draft Bill Controlling Digital Currency Issuance

A draft Emergency Ordinance has been released by Romania’s Ministry of finance which controls the issuance of e-money or electronic money. This new approach to digital currency control was as reported by Business Review on the 5^th of July.

Reportedly, the draft labels e-money as a monetary value which is magnetically and electronically stored, which represents a right on the issuer dispensed on receipt of monies for the goal of carrying out a payment transaction which is supported by a person asides from the electronic money issuer. As stated by the document, any legal body that is considering issuing electronic money must possess a share capital of at least $409,000 or €350,000 where its participants are subject of authorization by the BNR or Romanian National Bank.

Classes of Entities Qualified for Issuing E-Money

The document stipulates the classes of bodies that are qualified to issue e-money. Electronic money institutions, the national central banks, European Central Bank as well as credit institutions were listed. To gain authorization from the BNR, entities need to cultivate a formal structure for managing the cautiously created electronic money issuance activity. The authorization will supposedly have a 12 months validity which begins from the date it is issued. it will also be negated if a body does not begin e-money issuance during this period.

Once insurance activities commence, organizations will supposedly be indulged to offer yearly reports and send the accounts to the Romanian National Bank which will also function as the oversight entity. Unapproved e-money issuance is supposedly categorized as a crime and can attract serious disciplinary actions either by fine or 6 months to 3 years of imprisonment.

Even though ATMs for Bitcoin showed up in Romania in the beginning part of 2014, Ilan Laufer, the commerce, Entrepreneurship and Business Minister for the country voiced his faith in digital currencies in the year 2017, also stating that the space should be controlled.

It is a test for the banking structure because this environment is not properly regulated and I have faith that this should occur. It’s a zone where tons of cash flow, and it is equally a recent technology.

Requirements for Approval

The required documentation for attaining approval will be sent by the BNR and the length for analyzing the dossier is 3 months.

The BNR shall offer the approval only if it is certain that in view of the requirement to ascertain sound and prudent management of the electronic money provider, it has an organizational structure which is transparent, clear and properly defined, efficient steps for the management, identification, reporting and monitoring of risks which is may be open to as well as satisfactory mechanisms for internal control which include comprehensive procedures for accounting and administration.

Cases that Warrant Withdrawal of Approval

Authorization given to an e-money provider may also be withdrawn by the NBR in the following cases: The authorization was attained through illegal methods or incorrect information, the e-money issuance is not done on Romanian land, the institution for issuing e-money doesn’t meet the required conditions provided when the approval was given anymore.