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Romanian Authorities Draft a Bill to Regulate Issuance of Electronic Money


In a report appearing in a local news outlet on Tuesday, Romania has drafted an emergency ordinance for electronic forms of money.

According to the draft, electronic money is defined as “monetary value stored electronically, including magnetic, representing a claim on the issuer issued on receipt of funds for the purpose of performing payment transactions and which is accepted by a person other than the issuer of electronic money.”

The draft states that any legal entity that is considering the issuance of electronic money must have a share capital of at least EUR 350,000 ($409,000) and the members of the organization must be approved individually by the Romanian National Bank (BNR), following the verification of the tax and legal records.

The draft outlines the categories of firms that are eligible to issue e-money, which comprise credit institutions, electronic money institutions, the European Central Bank, and national central banks.

If approved, the draft would make BNR the sole authority over such products in the country. Upon approval by BNR, entities should come up with a formal framework to manage their e-money issuance activities. The authorization will reportedly be valid for 12 months from the date of issue, and cancelled if an entity does not start their issuance of e-money within this period.

The draft says that the supervision of electronic money issuance will be ensured by the National Bank of Romania, which will also issue the necessary authorizations for those who want to create a digital currency.  

3-Year Imprisonment Penalty

Once an entity starts their issuance activities, the issuer of the money is obliged to perform annual audits and periodically submit accounts of activity to the BNR.

The document says that the unauthorized issuance of e-money is reportedly considered a crime, and is punishable by imprisonment for a period of 6 months to 3 years – or by fine. The document also empowers the NBR to withdraw the authorization given to a provider of electronic money under various situations such as their operating beyond Romanian territories, or if the production of virtual money endangers the stability of the country’s payment system.

According to CoinDesk, currently, there are three entities that issue digital currencies in Romania: Capital Financial Services SA, Vodafone Romania M-Payments Ltd. and Orange Money Ltd, which entered the market at the end of last year.

Although Bitcoin ATMs were introduced in the country in early 2014, Cointelegraph reports that the country’s Business, Commerce and Entrepreneurship Environment Minister, Ilan Laufer, expressed his belief in digital currencies in 2017, also saying that the space should be regulated.

Romania becomes the latest country in Europe to regulate virtual money market after countries like Malta, Lithuania and Switzerland, which have given guidelines to the nascent industry.

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Are these new regulations going to succeed in Romania? Keep the conversation going in the comments section.