Legal Crypto In Cape Verde

Cryptocurrency in Cape Verde: The State of Regulation and the Market

The archipelago nation of Cape Verde, located off the northwest coast of Africa, has emerged as a participant in the global cryptocurrency landscape. This article provides an overview of the regulatory framework governing cryptocurrencies in Cape Verde, alongside insights into the decentralized finance (DeFi) and non-fungible token (NFT) markets.

The Legality of Cryptocurrency

In Cape Verde, cryptocurrencies are considered informal units of currency but are not recognized as legal tender for goods and services. They are, however, acknowledged as financial assets suitable for investment and trading. The absence of an outright ban reflects a permissive stance, with regulations focusing on compliance and mitigating risks such as money laundering.

Law No. 30/X/2023, enacted on June 22, 2023, forms the cornerstone of cryptocurrency regulation. This legislation governs virtual asset services and digital banks, mandating licensing for crypto exchanges and service providers by the Banco de Cabo Verde (BCV). It also enforces adherence to anti-money laundering (AML) and know-your-customer (KYC) protocols aligned with international standards.

Regulatory Framework

Law No. 30/X/2023 emphasizes consumer protection and financial stability through several key provisions:

• Licensing: Cryptocurrency exchanges and custodial services must obtain a license from the BCV, requiring robust AML/KYC programs and financial transparency.
• Tax Obligations: While specific tax guidelines for cryptocurrencies are not detailed, profits from trading or capital gains are subject to income or capital gains tax and must be reported.
• AML/KYC Compliance: Service providers are obligated to verify client identities and monitor transactions for suspicious activities, adhering to Financial Action Task Force (FATF) guidelines.

The BCV has expressed interest in exploring central bank digital currencies (CBDCs), though no concrete plans have been announced as of 2025, indicating a forward-looking approach to integrating digital assets into the financial system.

Exchanges and Methods of Exchange

Cape Verde’s cryptocurrency market is supported by both domestic and offshore exchanges, with KYC compliance being standard. Popular platforms include:

• Binance: Offers a wide range of cryptocurrencies with fiat on-ramps via bank transfers and mobile payment options compatible with the Cape Verdean escudo (CVE).
• Kraken: Known for its security, attracting users seeking reliable, compliant trading platforms.
• Local Platforms: Emerging exchanges provide CVE-denominated trading pairs and support local payment methods like mobile money transfers.

Peer-to-peer (P2P) trading, facilitated by platforms like Binance P2P, and bank transfers are common for fiat-to-crypto exchanges. The widespread use of mobile money in Cape Verde enhances accessibility for retail investors.

DeFi and NFT Markets

Decentralized Finance (DeFi): DeFi remains nascent in Cape Verde due to limited infrastructure and blockchain knowledge. Global platforms like Uniswap, Aave, and Compound are accessible, but adoption is low due to technological barriers such as the need for crypto wallets. DeFi operates in a regulatory gray area, as Law No. 30/X/2023 primarily targets centralized services, exposing users to risks from smart contract vulnerabilities and market volatility.

Non-Fungible Tokens (NFTs): The NFT market in Cape Verde is underdeveloped, with access to global platforms like OpenSea and Rarible but minimal local participation. NFTs are likely classified as digital assets under existing laws, with profits subject to taxation. While adoption in creative communities is limited, potential exists for tokenizing local art, music, or real estate as blockchain literacy grows.

Key Points

• The Banco de Cabo Verde regulates cryptocurrency transactions.
• Cryptocurrency profits must be reported for tax purposes.
• Mobile money integration facilitates crypto purchases.
• No specific laws govern DeFi or NFTs as of May 2025.

Useful Information

Aspect	Details
Regulatory Authority	Banco de Cabo Verde (BCV)
Key Legislation	Law No. 30/X/2023, effective June 22, 2023
Tax Status	Cryptocurrency profits subject to income or capital gains tax
Popular Payment Methods	Bank transfers, mobile money, P2P trading
DeFi Adoption	Low, with access to global platforms but limited local participation
NFT Market	Underdeveloped, with no local platforms but access to global marketplaces

Conclusion

Cape Verde’s approach to cryptocurrencies balances innovation with regulatory oversight. Law No. 30/X/2023 provides a structured framework for virtual asset services, fostering a compliant environment for exchanges while allowing room for DeFi and NFT markets to develop. Although these sectors are in their early stages, the country’s progressive stance and connectivity to global platforms position it as a potential hub for digital assets in West Africa. Continued improvements in infrastructure and blockchain literacy may drive greater adoption, provided regulatory clarity extends to emerging technologies.