Romanian authorities prepare draft bill regulating electronic money

Georgeta Gheorghe 05/07/2018 | 13:53

The Romanian Ministry of Finance has published a draft Emergency Ordinance regulating the activity of issuing electronic money, or e-money. The draft sets an EUR 350,000 threshold for the issuer’s social capital and demands that all members of the issuer be cleared by Romania’s central bank.  

The draft defines electronic money 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 project specifies that any legal entity that is considering the issuance of electronic money must have a share capital of at least EUR 350,000 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.

According to the project, the issuance of electronic money may be carried out by the following categories of electronic money issuers: credit institutions, electronic money institutions – legal person authorized to issue electronic money and providers of postal services emitting electronic money under the applicable national legal framework, the European Central Bank and the national central banks, when they do not act as monetary authorities or in any other capacity involving the exercise of public authority, Member States and their regional or local authorities when acting in their capacity as public authorities. Supervision of electronic money issuing 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.

The necessary documentation for obtaining the authorization will be submitted by the BNR, and the dossier analysis period is 3 months.

The National Bank of Romania shall grant the authorization only if it is convinced that, in view of the need to ensure a prudent and sound management of the provider of electronic money, it has a formal framework for the management of the carefully designed electronic money issuance activity, including a clear organizational structure with well-defined, transparent and coherent responsibility lines, effective procedures for identifying, managing, monitoring and reporting the risks to which it is or might be exposed and adequate internal control mechanisms, including rigorous administrative and accounting procedures.

The project specifies that any legal entity that is considering the issuance of electronic money must have a share capital of at least EUR 350,000 and the members of the organization must be approved individually by the National Bank following the verification of the tax and legal records.

According to the draft project, authorization is valid for 12 months from the date of issue. If the company does not start electronic money issuance within this period, the authorization will be canceled.

After the start of the activity, the issuer of money is obliged to perform annual audits and periodically submit the accounts of the activity to the BNR.

The NBR may also withdraw the authorization granted to a provider of electronic money in the following situations: the issuer of electronic money does not carry out electronic money issuance activity on the territory of Romania, the authorization was obtained on the basis of false information or any other illegal means, the issuing electronic money institution no longer fulfills the conditions under which the authorization was granted or other conditions laid down in this Chapter and the regulations issued
the continuation of the activity for which the emitting institution was authorized endangers the stability of the payment system.

Emission of electronic money without permit is a crime and is punished by imprisonment from 6 months to 3 years or by fine.

Currently, in Romania there are three entities that issue digital currencies: Capital Financial Services SA, Vodafone Romania M-Payments Ltd. and, since the end of last year, Orange Money Ltd.

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