TerraLex Cross-Border Guide to Crypto Assets

In Guatemala, crypto assets have not been defined. There is currently no regulation in force that governs, defines, permits, prohibits, sanctions, promotes, etc., the use of cryptographic currencies and assets.

With regards to currency, article 1 of the Monetary Law, Decree 17-2002 (hereinafter "Monetary Law") states: "The monetary unit of Guatemala is called Quetzal." Further, article 2 of the Monetary Law states that: "Only the Bank of Guatemala may issue banknotes and coins within the territory of the Republic, in accordance with this Law and the Organic Law of the Bank of Guatemala.

On December 19, 2017, the President of the Central Bank of Guatemala – BANGUAT – , in a press release, stated that cryptocurrencies are not considered as currencies in Guatemala, and therefore, do not constitute a means of payment of legal tender. Both the Superintendence of Banks and the BANGUAT have publicly stated that cryptocurrency does not belong to any State and has not been adopted as official currency or legal tender of any country. Therefore, cryptocurrency cannot be considered as currency in Guatemala.

Enthusiasts have inquired whether cryptocurrency may be considered as another type of asset, title, or goods as regulated by specialized laws in Guatemala. The authorities have yet to provide further guidance on the matter.

Crypto assets are not regulated, and there are no rules prohibiting their use. From an administrative/regulatory point of view, in February 2021, the Superintendence of Banks (banks regulator) issued a formal press release acknowledging the receipt of several queries from economic agents with regards to virtual assets (cryptocurrency such as Bitcoin, Ethereum, Ripple and others), and shared that, according to the Monetary Law, the sole unit of currency in Guatemala is the Quetzal, issued exclusively by the Central Bank. Virtual currency is not supported by the State of Guatemala, nor is it considered as currency, and all persons dedicated to its commercialization are not under the supervision and vigilance of the authorities, therefore, operating at high risk.

No.

If regulated, it is expected that the key regulatory authorities involved would be the Superintendence of Banks (“SIB”), the Central Bank of Guatemala, and potentially the Ministry of Economy. Secondarily, agencies protecting consumers may also issue regulations regarding related products and/or services.

SIB, the financial system regulator, has created the "SIB INNOVATION HUB", which analyzes the environment of innovative financial technologies, the development of trends, and the identification of associated risks that may affect the digital financial environment. In the future it seeks to create a regulatory sandbox. Likewise, the Government of Guatemala, via the Ministry of Economy, the SIB and the Central Bank, created the National Strategy for Financial Inclusion 2024-2027 (hereinafter "ENIF"). The ENIF is not at the regulatory level, but its purpose is to expand and improve the technological and non-technological financial system. With the creation of these entities, the regulator is taking major steps to evaluate the national landscape.

No. Current AML legislation dates from 2001, a law and its framework.

There is a bill being discussed in Congress since July 2020, which contemplates the figure of providers of services regarding virtual assets (VASPs). This bill, identified as 5820, was presented to Congress by the Executive Branch and intends to update current AML regulation.

The use of Blockchain in the financial services sector is not regulated in Guatemala.

Because there is no specific regulation for crypto assets in Guatemala, and no consensus as to the legal nature of such, potential taxing obligations are a matter of concern that has been in discussion among academics and users. Generally speaking, transactions involving the exchange of goods and services involve Value Added Tax (VAT), Income Tax (ISR) and capital gains obligations, however, the tax interpretation pertaining to these currencies may vary according to the legal nature given to them.

No, there is currently no specific regulation in this moment which recognizes crypto assets as a type of property. According to its characteristics, cryptocurrency may be classified as property or an intangible asset from an accounting point of view, and not yet as currency (local/foreign), ledger, title, security, merchandise, etc. As per our Civil Code, goods are all things that are or may be subject to appropriation and are classified as real estate and movable goods. Further, all things that are not excluded from commerce by their nature or by law may be considered objects.

Guatemala will protect assets that are registered in any public registry under the holder´s name.

Yes. Article 1517 of the Civil Code states that a contract exists when two or more people agree to create, modify, or extinguish an obligation. Article 1518 of the same legal body, in its pertinent part, establishes that contracts are concluded by the simple consent of the parties. Likewise, Article 1519 of the Civil Code stipulates that from the moment a contract is agreed, it obligates the contracting parties to comply with what has been agreed. Based on the aforementioned rules, the freedom of contracting that individuals have is established. Therefore, if the parties want to trade with cryptocurrencies, that would be binding and mandatory. In addition, negotiation of crypto assets is not prohibited. The Law for the Recognition of Electronic Communications may also regulate the agreements.

There is no regulation governing security over crypto assets. However, the Law of Movable Guarantees Decree 51-2007 (hereinafter Law of Movable Guarantees), states that the purpose of the law is to govern movable guarantees and the Registry of Movable Guarantees. Article 2 of the Law of Movable Guarantees establishes that incorporeal property is any movable property that is not tangible. Likewise, Article 3 of this law defines movable collateral as any tangible movable property, whether corporeal, incorporeal, or derivative. Article 4 states that movable collateral may be created by contract between the parties or by provision of the law, and Article 10 states that movable collateral may be created by means of a private agreement. Therefore, based on the foregoing, crypto assets, if classified as intangible assets, may serve as security.

There is no regulation for inheritance tax relief.

There are considerable efforts from the local Fintech community, and pressure from the Financial Action Task Force (from the AML point of view) to develop an adequate regulation to crypto and its actors.

The Central Bank authorities have issued certain academic position studies on nature, background, laws regulating assets/property, and presumed tax implications of crypto, and the Superintendence of Banks has also featured certain presentations on the matter asserting that the regulation is being drafted. Tech-related legislation was lastly enacted in 2008 (electronic communications), and certain frameworks for financial institutions have been more recently issued by the Superintendence of Banks (2020, 2021).

Guatemala´s Fintech Association, ENIF, and SIB INNOVATION HUB are currently analyzing the crypto asset and fintech ecosystem in Guatemala for the purpose of creating a regulatory sandbox in the future. No bill has been presented in Congress.

In Guatemala, there is not a generalized use of cryptocurrencies, however, there has been an increase in their familiarity, use, and adoption by some commerce ventures.

No.