Virtual Currencies Comparative Guide

• Published date: 21 January 2021
• Subject Matter: Technology, Fin Tech
• Law Firm: Legantislaw
• Author: Mr Juan José Porres and Dario Alejandro Ramirez Monzon

1 Legal and enforcement framework

1.1 In broad terms, which legislative and regulatory provisions govern virtual currencies in your jurisdiction?

In Guatemala, there are no legislative or regulatory provisions which specifically govern virtual currencies. However, virtual currencies are not expressly prohibited, which implies that they can exist and be used under private law.

1.2 In broad terms, which legislative and regulatory provisions govern entities that provide services relating to virtual currencies? Must they be registered or licensed by a regulatory authority?

In Guatemala, entities that provide services relating to virtual currencies - commonly known as virtual asset service providers (VASPs) - do not require a licence or special registration to operate or provide services. To operate legally in Guatemala, a VASP requires only the same registrations as any other commercial service provider. While at present the Guatemalan government does not rely on legal tools to supervise VASPs, this could change in the future.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The principal governmental institutions are:

• the Unit of Financial Intelligence, part of the Special Verification Intendency. This unit and its intendency are part of Guatemala's Superintendency of Banks (SIB) and are in charge of supervising entities for anti-money laundering purposes;
• the Guatemalan Tax Administration, which oversees taxes;
• the Customer Service Department, which is responsible for protecting consumers and service users; and
• the Stock and Merchandise Market Registry, which may oversee the use of virtual currencies in investment contracts.

As mentioned in question 1.2, Guatemala has no special laws and regulations on virtual currencies. However, it is evident that many activities relating to virtual currencies imply a direct relation between various governmental entities. Unfortunately, however, most public entities in Guatemala have little or no knowledge of virtual currencies.

1.4 What is the regulators' general approach to virtual currencies?

As yet, no specific focus or approach has emerged, as the topic is little discussed and poorly understood. The SIB recently established a special department to investigate and document financial innovations, including virtual currencies; but as yet, it has issued no opinions or guidance on the subject.

1.5 Has there been any notable enforcement action relating to virtual currencies?

Guatemala's executive body recently presented Law Initiative 5820 to Guatemala's Congress on the prevention of money laundering and terrorist financing, which - among other things - would regulate new activities that are not currently regulated in Guatemala (including those involving virtual currencies). This is a response to recommendations by the Financial Action Task Force.

2 Definitions

2.1 How are 'virtual currencies' defined in your jurisdiction? Have there been any judicial decisions which have helped to define virtual currencies or their interplay with the existing body of laws (eg, contracts law, property law)?

In Guatemala, there are no official definitions of 'virtual currencies'. As yet, there have been no judicial decisions which would help to define virtual...