Highlights of the Republika Srpska Electronic Money (E-Money) Law

The Republika Srpska Electronic Money Law was published on 5 January 2024 in the Official Gazette of Republika Srpska. The piece of legislation will become effective six months after its publication date.

The law defines e-money as an electronic (or magnetic) store of monetary value that constitutes a monetary claim on its issuer, which is issued after the receipt of cash, can be used for payment transactions, and is accepted by legal persons other than the issuer.

E-money can be issued by:

• banks;
• microcredit companies;
• e-money issuers licensed by authorities of the Federation of Bosnia and Herzegovina or the Brčko District of Bosnia and Herzegovina;
• the Ministry of Finance and local authorities in Republika Srpska where the e-money is issued in the exercise of their sole competencies as established by specific legislation.

The Republika Srpska Banking Agency will be responsible for licensing and overseeing e-money issuers.

The law specifically regulates the following aspects:

• e-money issuance (comprising issuance, acceptance, and redemption of e-money);
• requirements for incorporation, operation, and termination of e-money issuers;
• oversight of e-money issuance (including oversight bodies, administrative proceedings, and oversight measures); and
• penalties (misdemeanour proceedings).

At the time of establishment, e-money issuers must provide paid-up capital of KM 700,000 maintain this level of core capital at all times thereafter.

The law also allows for hybrid entities that issue e-money alongside other activities as regulated by other pertinent legislation.

The law is expected to facilitate day-to-day business operations and help prevent money laundering, terrorism financing, and internet payment fraud. It will also make it much safer to use e-money on a daily basis and strengthen online communications networks.