Crypto Overview in Madagascar

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

The Republic of Madagascar operates one of the least formally developed cryptocurrency regulatory environments among the larger African economies. Cryptocurrencies are unregulated rather than prohibited, with the central bank’s public communications limited to a 2021 warning that virtual assets are not issued or regulated by any monetary authority and do not constitute legal tender. The country’s regulatory energy in 2024 and 2025 has been absorbed by AML/CFT modernisation through new implementing legislation, by a political rupture in October 2025 that suspended the legislative cycle, and by the parallel expansion of mobile money rather than by virtual asset policy. Against that backdrop, the country is nonetheless piloting a central bank digital currency, the eAriary, which launched in October 2025.

Legal Classification and Regulatory Framework

Cryptocurrency Status

Cryptocurrencies are not legal tender and there is no comprehensive crypto-specific statute. The Banky Foiben’i Madagasikara (BFM) issued a public communiqué on 5 October 2021 warning that crypto-assets are neither issued nor regulated by the BFM or any other monetary authority. Article 9 of Law 2016-004 on the BFM statutes reserves the issuance of legal tender to the central bank. This framework places Madagascar in a permissive gap: activity is not explicitly banned, but no legal recognition, protection, or supervisory structure exists for participants. A subsequent BFM communication in 2022 acknowledged the institution was examining the concept of an e-Ariary central bank digital currency, which has since moved from research into a formal pilot.

Tax Treatment

The Direction Générale des Impôts has not published crypto-specific tax guidance. The General Tax Code, with a 2022 base text and a 2024 update published on the DGI portal, does not single out virtual assets. In the absence of dedicated rules, the default treatment applies: corporate income tax at 20% (with a reduced 10% rate for qualifying small enterprises below the relevant threshold) and personal income tax at progressive rates up to 20% apply to crypto-related income. Capital gains on virtual asset disposals are treated as ordinary income and taxed accordingly. Madagascar ratified the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters in July 2025, enabling automatic exchange of tax information with treaty partners, though this does not by itself create a domestic crypto tax framework.

Regulatory Oversight

The Banky Foiben’i Madagasikara is the monetary authority and has issued the country’s only public crypto-related communications. The Commission de Supervision Bancaire et Financière (CSBF) supervises banks and microfinance institutions. The Service de Renseignements Financiers (SAMIFIN), attached to the Presidency of the Republic and created in 2007, serves as Madagascar’s financial intelligence unit under Law 2018-043 of 13 February 2019 and acts as the AML/CFT lead. The Direction Générale des Impôts administers tax. No dedicated virtual asset supervisor has been designated.

Business Environment

Banking Relationships

The BFM’s 2021 communiqué effectively discourages banks from facilitating crypto activity, although it does not formally prohibit them from doing so. Banking penetration remains low outside Antananarivo and a small number of urban centres, with mobile money playing the dominant role in retail payments. Practical bank-based on-ramps to cryptocurrency are limited as a result. The three-way interoperability achieved between MVola (Telma), Orange Money, and Airtel Money under the GSMA Mobile Money Interoperability programme means that mobile-money-to-crypto bridging is technically feasible but operates informally and without a clear legal basis.

Innovation Support

The BFM has not launched a formal regulatory sandbox. Madagascar’s payments innovation story is driven primarily by mobile money: MVola, Orange Money, and Airtel Money have collectively reached the majority of the adult population and represent one of Sub-Saharan Africa’s more advanced three-operator interoperability achievements. MVola, with around 3.6 million registered users, became the first mobile money provider in the country to offer a loan facility. A proposed 0.5% tax on mobile money transactions exceeding 150,000 MGA, announced by the Direction Générale des Impôts in late 2024, drew strong opposition from all three operators on the grounds that it would increase transfer fees by up to five times and threaten the livelihoods of approximately 164,000 distribution agents; the policy remained unresolved as of the first half of 2025. No government programme targets virtual asset innovation specifically.

Crypto License in Madagascar

Madagascar has not established a VASP licensing regime. No registration requirement, application form, or authorised-activity list for virtual asset service providers exists. The most significant recent development is Décret n° 2024-1352, the implementing decree for Madagascar’s AML/CFT law (Loi sur la Lutte contre le Blanchiment de Capitaux et le Financement du Terrorisme, or Loi LBCFT), published by SAMIFIN in January 2025. While that decree extends AML/CFT obligations to entities dealing in virtual assets, it does not create a positive licensing pathway for VASPs to obtain authorisation to operate.

Current Status

There is no legal basis for a VASP to register with or obtain a licence from any Malagasy authority. The country’s AML/CFT framework, updated by Law 2023-026 amending Law 2018-043 and further specified by Décret 2024-1352, imposes know-your-customer, record-keeping, and suspicious transaction reporting obligations on entities in scope but does not define a registry or a supervisory pathway. SAMIFIN is the designated AML/CFT supervisor but has not been formally named as a VASP licensing authority. The legislative cycle was interrupted by the October 2025 political transition, which brought military-led transitional governance and a suspension of African Union membership, further delaying any prospective crypto rulemaking.

Why No Framework

The absence of a VASP regime reflects several converging factors. Madagascar has one of the highest informality rates in the world: the informal economy accounts for the substantial majority of economic activity, which limits the bandwidth of financial regulators to develop and enforce new licensing frameworks. The BFM’s regulatory priorities since 2020 have been focused on currency stability, financial inclusion through mobile money, and the multi-year eAriary CBDC design and pilot process rather than on virtual asset oversight. The ESAAMLG enhanced follow-up process has pushed Madagascar to address core technical compliance deficiencies in its AML/CFT architecture; virtual asset regulation, while referenced in FATF Recommendation 15, has not yet risen to a concrete legislative action. Madagascar is also not subject to a regional framework with a binding VASP directive, unlike UEMOA (BCEAO) or CEMAC (BEAC) member states, meaning there is no external supranational push to accelerate domestic action.

What Operators Should Know

Entities wishing to operate a crypto exchange, custody service, or related VASP function in Madagascar face legal uncertainty rather than a clear prohibition. In practice, operators must comply with the AML/CFT obligations set out in Décret 2024-1352 and report suspicious transactions to SAMIFIN. General business registration requirements apply through the Centre de Formalités des Entreprises. There is no fee schedule, capital adequacy requirement, or fit-and-proper test specific to virtual asset businesses. Any foreign operator accessing the Malagasy market does so without a regulatory anchor, which increases legal exposure under future retrospective regulation. Practitioners uniformly advise monitoring SAMIFIN communications and the outputs of Madagascar’s ongoing ESAAMLG enhanced follow-up process for the earliest signals of a forthcoming VASP licensing framework.

Market Characteristics

Adoption Patterns

Reliable on-chain adoption data for Madagascar is sparse. Activity is informal and concentrated on international platforms accessed through international card payments and mobile-money intermediaries. The domestically developed platform Voaray, which integrates Bitcoin, USDT, and Ether alongside MVola, Orange Money, and Airtel Money payment rails, represents the most visible local bridge between the mobile money ecosystem and crypto assets. It allows users to buy, sell, and exchange crypto for Malagasy ariary (MGA). The dominance of mobile money in everyday domestic payments and the limited bank-based crypto on-ramps together constrain retail visibility and scale.

CBDC Development

The most structured digital-asset development in Madagascar is the BFM’s eAriary CBDC. In October 2025, BFM formally launched the pilot phase in partnership with eCurrency Mint (DSC3 technology) and PayLogic SA. Under the model, BFM remains the sole issuer while distribution to the public is handled by commercial banks, e-money providers, microfinance institutions, and fintech companies. Governor Aivo Andrianarivelo described the goal as reducing dependence on banknotes and expanding financial inclusion in rural areas. The eAriary is denominated in MGA and operates as a digital bearer instrument alongside existing notes and coins, placing it entirely within the existing legal tender framework rather than in the VASP space.

Regulatory Evolution

Madagascar is a member of ESAAMLG. Its 2018 mutual evaluation identified extensive technical compliance deficiencies; the country has remained in enhanced follow-up since. Progress has been material: the 10th Enhanced Follow-Up Report of April 2024 re-rated seven Recommendations upward, bringing Madagascar to Compliant on 9 Recommendations, Largely Compliant on 14, Partially Compliant on 15, and Non-Compliant on 8. The travel rule (Recommendation 16) reached Largely Compliant in April 2024. Madagascar is not currently on the FATF list of jurisdictions with strategic AML/CFT deficiencies. The October 2025 political transition interrupted the legislative cycle; no crypto-specific rulemaking has emerged from the transitional authorities. The most probable near-term path to formal virtual asset rules is the operationalisation and enforcement of the VASP-relevant provisions in Décret 2024-1352 once political conditions permit, alongside any obligations arising from Madagascar’s continued ESAAMLG follow-up commitments.