DLT and cryptocurrencies
FinTechs belonging to this category offer financial services using crypto currencies. This category also includes FinTechs utilising blockchain and distributed ledger technologies (DLT) upon which Bitcoin and Ethereum are based, among others. FinTechs develop and do research in this field in order to create new services – e.g. crypto currency exchange markets, wallet providers, NFTs-related services, new payment services, "smart contracts" or new clearing and settling services.
Attitude of the country towards financial services using crypto currencies
From a social perspective, the Dominican Republic has an avid crypto community. What started as a community of P2P crypto traders and investors, has now grown. Today, there are several Dominican capital Start-ups working in the space including exchanges; and Dominican artists have minted NFTs.
From a political and regulatory perspective, however, there are reservations. The Central Bank of the Dominican Republic has issued two separate statements regarding crypto currencies essentially saying that crypto assets are not government-backed and are not fiat currency; and that those that chose to deal or invest on such assets do so at their own risk. In the same statements, the Dominican Central Bank also warned banks and other regulated financial institutions that dealing with crypto assets may generate fines or sanctions towards them.
Obligations and requirements to provide financial services using crypto currencies described above
The Dominican Republic does not have a crypto license or crypto regulation. Should the service based on crypto also fit into one of the definitions for activities that require licenses (such as financial intermediation), the company or individual performing such activities would need that specific license.
Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
Most local banks do not take on clients that deal in crypto currency related services.
Market size for financial services using crypto currencies and biggest companies in this business area
Statista estimates the size of the Dominican crypto market by revenue at USD 12,436,000 for 2022. The two best known local (Dominican founded, lead and funded) exchanges are BitcoinRD and Momento. However, Dominicans also have access to larger international exchanges such as Binance and Coinbase.
Additional comments regarding the economic situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area