In April of this year, Nicaragua took a decisive step toward consolidating its digital financial ecosystem by issuing a new regulation for Fintech companies. This new framework replaces the 2022 regulation and introduces a more robust and structured legal foundation aligned with international standards.

This regulatory milestone reflects the country’s ongoing efforts to foster innovation, enhance consumer protection, and strengthen mechanisms to prevent money laundering and the financing of terrorism.

Key Elements of the New Regulation

The updated framework identifies and regulates two main categories of actors:

• Payment Service Providers (PSPs): This includes electronic wallets, issuers of electronic money, and payment gateways.
• Virtual Asset Service Providers (VASPs): This includes cryptocurrency exchanges, custodians, and digital asset transfer platforms.

Both categories are now subject to mandatory licensing issued by the Central Bank of Nicaragua, with differentiated minimum capital requirements ranging from US$110,000 to US$300,000, depending on the type and scope of the activities involved.

In addition, the regulation introduces enhanced standards for corporate governance. These include prior approval of senior executives by the regulator, formal risk management policies, strong Know Your Customer (KYC) procedures, internal audit functions, and robust compliance programs.

Implications for the Financial Ecosystem

The implementation of this regulation marks a turning point for Fintech development in Nicaragua. On one hand, it strengthens trust among consumers and investors by establishing clear rules and supervisory mechanisms. On the other, it presents meaningful challenges for new market entrants, who must now professionalize their operations and meet regulatory demands that, while necessary, raise the bar for participation.

Given this context, it is essential for both local and foreign Fintechs looking to operate in Nicaragua to seek specialized legal counsel. Proper legal structuring is key to ensuring compliance, financial sustainability, and effective risk management.

With this new framework, Nicaragua aligns itself with a broader regional trend aimed at formalizing financial innovation and fostering a more predictable, competitive, and secure market environment.

At Dentons, we support technology companies, financial institutions, and new market entrants in adapting to Nicaragua’s evolving Fintech regulatory landscape. Our regional and global perspective enables us not only to ensure compliance but also to identify strategic opportunities for our clients. We design solid legal structures that protect business viability, manage regulatory risk, and deliver long-term value in an increasingly dynamic financial environment.

For more information on how to align your Fintech operations with Nicaragua’s new regulatory framework, please contact the Dentons team.