Crypto Overview in Andorra

Regulatory data is for informational purposes only and may not reflect the most current legal developments. Always consult qualified professionals before making decisions.

Legal Classification and Regulatory Framework

Cryptocurrency Status

Cryptocurrencies are legal in Andorra but are not legal tender. The euro is the official currency under a Monetary Agreement signed with the European Union in 2011, even though Andorra does not belong to the EU, does not operate a central bank, and is not part of the European Economic Area.

The cornerstone of the digital asset regime is Llei 24/2022, del 30 de juny, de la representació digital d’actius mitjançant l’ús de criptografia i de la tecnologia de registre distribuït i blockchain. The law entered into force on 20 October 2022 and established the first comprehensive domestic framework for the issuance, exchange, custody, and intermediation of digital assets in Andorra. It built on a 2021 amendment to the Electronic Trust Law that introduced legal definitions for DLT records and extended them into a token taxonomy covering electronic money tokens, asset-referenced tokens, utility tokens, and NFTs. Tokens qualifying as financial instruments were carved out and remain subject to a separate reform. Law 42/2022, adopted in parallel, addresses digital economy and entrepreneurship more broadly. Both laws grew from the Govern d’Andorra’s Horitzó 23 digital transformation plan.

The architecture of Llei 24/2022 mirrors the classification structure of MiCA, positioning Andorra for potential equivalence discussions through the EU Association Agreement whose negotiations concluded in December 2023 and whose ratification referendum is expected around 2026. In the interim, the AFA sandbox, operational since 2023, allows innovators to test novel digital asset models under controlled supervision.

Tax Treatment

Andorra applies a low and broadly flat tax system. Personal income tax (IRPF) on capital gains from cryptocurrency disposals is taxed at a top marginal rate of 10%, with the first €3,000 of annual capital gains exempt. Each exchange or sale triggers a taxable capital variation measured in euros at the time of the transaction, meaning crypto-to-crypto swaps are taxable events and not deferred until conversion to fiat. Losses may be offset against capital gains of the same nature within the same tax year and, in certain circumstances, carried forward.

Law 5/2023, effective 1 January 2024, confirmed that digital assets are assessed under the savings base of the IRPF by analogy to capital variations under Article 24 of Law 5/2014. Corporate profits of exchanges, custodians, and other digital asset service providers are subject to corporate tax (Impost sobre Societats) at 10%. There is no wealth, inheritance, or gift tax. Dividends paid by Andorran companies to resident individuals are exempt from IRPF. The general indirect tax (IGI) at 4.5% typically does not apply to the trading or payment use of cryptocurrencies.

Regulatory Oversight

The Autoritat Financera Andorrana (AFA) is the country’s integrated financial regulator. It supervises all activities involving digital assets under Llei 24/2022, operates the Innovation and FinTech engagement function, maintains the AFA sandbox, and enforces conduct and prudential standards across banking, insurance, and investment services. In October 2024 the AFA published Comunicat tècnic 3/2024-PAD, which sets out periodic information requirements that digital asset participants must meet on an ongoing basis after authorisation.

The Unitat d’Intel·ligència Financera d’Andorra (UIFAND) is the financial intelligence unit responsible for anti-money laundering and counter-terrorist financing supervision. UIFAND maintains the register of obliged entities and enforces customer due diligence, beneficial ownership identification, suspicious transaction reporting, and Travel Rule expectations aligned with FATF Recommendation 16. Law 37/2021 expressly brought crypto exchange platforms and custodians into the scope of obliged entities, and Decret 46/2025 (February 2025) further updated the AML regulation implementing the underlying Law 14/2017 on prevention and fight against money laundering and terrorist financing. The Police Department co-supervises certain aspects of the digital asset regime, while AREB handles bank resolution matters.

MONEYVAL launched its sixth-round mutual evaluation of Andorra in April 2025, building on the 2017 fifth-round assessment which placed Andorra in enhanced follow-up. Subsequent progress reports recognised improvements in beneficial ownership transparency while highlighting the need to strengthen money laundering investigations and inter-agency coordination.

Business Environment

Banking Relationships

The Andorran banking sector is anchored by three institutions: Andbank, Creand (formerly Crèdit Andorrà, which absorbed VallBanc in 2022), and MoraBanc. All three operate private banking franchises with international client books and apply AFA-driven AML standards. MoraBanc launched the country’s first regulated crypto custody offering, enabling clients to hold Bitcoin, Ether, and stablecoins within a supervised custody framework. Andbank has expanded its digital asset and tokenisation services for qualified investors through its digital platform. Crypto exposure is generally accessed through private banking relationships and structured products rather than direct retail trading.

EU Integration and Alignment

Andorra transposed MiFID II through Law 7/2024, aligning its investment services framework with EU standards on advisory services, product governance, best execution, and client information. DORA has been listed for transposition under the July 2025 amendment to the Monetary Agreement annex, with a deadline of 31 December 2028. Under Framework Protocol 3 on financial services in the Association Agreement, Andorra will progressively join the EU single market and adopt the broader financial acquis. MiCA does not yet apply, but the AFA’s token taxonomy and licensing requirements closely parallel MiCA’s structure in anticipation of future equivalence discussions.

Innovation Support

Llei 19/2025 created Andorra Digital, SA, a public company driving digital interoperability and international positioning. Decret 373/2025 launched a national Digital Wallet aligned with eIDAS 2.0. The AFA sandbox, active since 2023, allows applicants to pilot novel financial models under regulatory supervision. Private sector activity around blockchain infrastructure, tokenisation, and asset management is concentrated in Andorra la Vella, supported by a professional services community with specialist digital asset practices.

Crypto License in Andorra

Any business that issues tokens, operates an exchange, provides custody, runs a DeFi platform, or hosts an NFT marketplace from Andorra must obtain prior authorisation from the AFA under Llei 24/2022 before commencing activity. Mining operators are registered separately. The licensing regime is designed to protect investors and market integrity while remaining proportionate to the scale and risk profile of each activity.

Licensing Requirements

All applicants must satisfy the AFA on fitness and propriety for all qualifying shareholders and proposed directors, demonstrating adequate minimum capital and civil liability insurance calibrated to the activity’s risk profile. The AFA determines the specific capital threshold by activity type during the authorisation review rather than publishing a universal figure. Applicants must also document their cybersecurity architecture, smart contract logic, distributed ledger auditability, and operational resilience. An AML and CFT compliance programme covering customer due diligence, beneficial ownership identification, suspicious transaction reporting to UIFAND, and Travel Rule compliance must be in place from day one. Token issuers must additionally prepare a white paper disclosing the nature of the digital asset, its link to any underlying value, issuance conditions, and holder rights.

A distinctive requirement of the Andorran regime is the mandatory appointment of a veedor digital registrat (registered Digital Overseer), regulated by Decret 478/2022. The Overseer must be a licensed lawyer or economist with Andorran nationality or tax residency. Critically, the Overseer is the sole authorised interlocutor between the applicant and the AFA: no application can be submitted directly. After authorisation, the Overseer continues to audit ongoing compliance with the law, the white paper, and smart contract logic, and reports to the AFA.

Authorised Activities

Llei 24/2022 defines separate authorisation categories: public token issuance (electronic money tokens, asset-referenced tokens, utility tokens, NFTs), digital asset trading platform operation, digital asset custody, DeFi platform operation, and NFT marketplace hosting. Collective investment schemes investing in digital assets may only use the “other UCIs” structure under the Funds Act. Certain offerings are exempt from full licensing: offers to fewer than 100 persons per country, offers with a denomination of at least €50,000 per unit, and offers where each investor subscribes at least €50,000 per transaction. Crypto mining is not covered by the main licence but requires separate registration under the Administrative Registry of Crypto Asset Mining Entities (Decret 335/2022), which assesses energy and grid impact.

Application Process and Timeline

The AFA authorisation procedure is two-tiered: formal authorisation followed by registration. Applicants must first engage a registered Digital Overseer, who initiates the process through the AFA’s Virtual Private Office. The dossier submitted through the Overseer must include corporate documentation, shareholder and director profiles, technology documentation, the AML compliance programme, the white paper (for issuers), and evidence of required capital and insurance. The AFA’s published guidance indicates that the full authorisation and registration process takes approximately three months from receipt of a complete application. Incomplete dossiers restart the clock, so practitioners recommend assembling the full package before filing. Entities with novel structures are encouraged to engage the AFA’s Innovation and FinTech team before submitting, and the sandbox pathway is available for genuinely untested models that require regulatory observation before full authorisation.

Market Characteristics

Adoption Patterns

Andorra has roughly 80,000 residents and an economy built on tourism, retail, and private banking. The domestic crypto market is small in absolute terms. AFA communications and industry reports describe meaningful growth in regulated digital asset activity since Llei 24/2022 entered into force in October 2022, driven primarily by professional investors, family offices, and Andorran residents accessing digital assets through private banking channels. Retail consumer adoption reflects patterns seen in neighbouring jurisdictions but operates within a tightly supervised banking system where onboarding and AML checks are thorough.

Industry Focus

Andorra’s competitive advantages for digital asset businesses lie in its low flat tax rates, stable governance, compact regulatory environment, and private banking infrastructure. Most digital asset projects established in Andorra focus on tokenisation of investment products, regulated custody for private banking clients, fund structures using the participation exemption, and consultancy services aimed at family offices and high net worth individuals. The low 10% corporate tax rate and absence of wealth and inheritance taxes make it attractive for holding and structuring digital asset wealth. Energy-intensive mining operations are constrained by the registration regime and the managed national electricity grid.

Regulatory Evolution

Andorra is moving toward closer alignment with European standards through domestic legislation and the Association Agreement process. Law 7/2024 transposed MiFID II, work on a consolidated financial code is underway, and DORA transposition is due by end-2028. The Association Agreement referendum, expected around 2026, will set the pace for Andorra’s eventual single market participation. Public opinion remained divided in late-2025 polling. For the digital assets sector, the trajectory points toward incremental EU convergence without full MiCA applicability in the near term. MONEYVAL’s sixth-round evaluation, launched April 2025, will benchmark Andorra’s AML and crypto supervision frameworks against international standards.

• Autoritat Financera Andorrana (AFA)
• Unitat d’Intel·ligència Financera d’Andorra (UIFAND)
• Govern d’Andorra
• Andorran Banking Association
• Council of Europe MONEYVAL: Andorra
• FATF: Andorra