Crypto Overview in Solomon Islands

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

The Solomon Islands is a small Pacific island economy with low banking penetration, a growing mobile money market, and one of the most advanced central bank digital currency pilots in the Pacific region. Private cryptocurrencies, however, are not addressed by dedicated legislation. There is no Virtual Asset Service Provider licensing regime, no tax rulebook for digital assets, and no supervisory framework for crypto businesses, while the central bank has publicly cautioned that cryptocurrency is not legal tender and warned the public against speculative investment.

Legal Classification and Regulatory Framework

Cryptocurrency Status

Cryptocurrencies are not recognised as legal tender in the Solomon Islands. The Central Bank of Solomon Islands Act 2012, as consolidated through the 2024 reprint, grants the Central Bank of Solomon Islands (CBSI) sole authority to issue currency. The Payment Systems Act 2022 further defines electronic money as only that issued by the Central Bank; banknotes, coins, and CBSI-issued electronic money that have not been withdrawn from circulation constitute legal tender. No statute classifies private crypto as property, commodity, or security, and there is no comprehensive ban. Trading on offshore platforms therefore occurs in a legal grey area: neither expressly authorised nor expressly prohibited, with consumers receiving no statutory protection. The CBSI has issued multiple public warnings stating that investment in digital currencies is speculative and risky, and that the bank does not endorse unregulated cryptocurrencies.

Tax Treatment

Crypto activity falls under the general Income Tax Act. Resident companies are taxed at 30% and non-resident companies at 35%, with residents taxed on worldwide income. Personal income tax for individuals is applied on a progressive scale. The Inland Revenue Division (IRD) has published no crypto-specific guidance or ruling, so gains or income from digital asset activity default to ordinary income concepts under the Act where assessable. There is no capital gains tax regime, and no withholding tax framework specific to digital asset transfers. Operators and investors should obtain written advice before relying on any particular tax position, given the absence of formal administrative guidance.

Regulatory Oversight

The Central Bank of Solomon Islands is the monetary authority and financial system supervisor and hosts the Solomon Islands Financial Intelligence Unit (SIFIU), which administers the anti-money-laundering and counter-terrorist financing framework. The Ministry of Finance and Treasury and the Inland Revenue Division handle fiscal and tax policy. Solomon Islands is a member of the Asia/Pacific Group on Money Laundering (APG); the most recent mutual evaluation report was adopted in August 2019, following an on-site visit conducted by the World Bank in October and November 2018. The report rated effectiveness as zero Highly Effective and zero Substantially Effective across all eleven effectiveness areas, reflecting systemic capacity constraints, and prompted an APG strategic planning workshop in February 2020. Solomon Islands is not currently on the FATF grey or black list.

Business Environment

Banking Relationships

The banking sector is small and conservative. A minority of adults hold formal bank accounts, with many relying on mobile money agents or informal channels. In practice, banking access for cryptocurrency business is severely restricted, and on-ramps and off-ramps for retail users run through informal peer-to-peer arrangements rather than licensed exchanges. Remittance corridors from Australia and New Zealand are the dominant cross-border payment flows, channelled primarily through the M-Selen mobile money service, which launched in 2023 and has reached a substantial share of the adult population through a growing network of agents. No domestic licensed exchange or custodian operates in the country.

Innovation Support

The CBSI Amendment Act 2023, enacted on 3 November 2023, created legislative headroom for a central bank digital currency and introduced a regulatory sandbox concept for digital innovation. The Bokolo Cash proof of concept, named after a traditional Solomon Islands shell currency historically used for bridal dowries, land transactions, and tribal reconciliation, is one of the most advanced CBDC pilots in the Pacific. Built on a Hyperledger Iroha 2-based permissioned blockchain and developed in partnership with Japanese fintech firm Soramitsu with funding from the Japanese government, it covers retail merchant payments in the capital Honiara, person-to-person transfers, wholesale interbank testing, and simulated cross-border remittance scenarios. Participants undergo a two-tier know-your-customer and eKYC verification process. As of mid-2026 the project remains in pilot phase rather than full production rollout, and no decision on national deployment has been publicly announced. The sandbox concept embedded in the 2023 amendment applies to CBDC-related digital innovation rather than private crypto ventures.

Crypto License in Solomon Islands

There is no crypto licensing regime in the Solomon Islands. No framework for registering or authorising Virtual Asset Service Providers has been enacted, and businesses offering crypto exchange, custody, brokerage, or stablecoin services cannot obtain a Solomon Islands authorisation because none exists. The country is in a no-framework position common to several Pacific island nations that have chosen to monitor global standard-setting before legislating.

Current Status

No VASP registration, licence, or approval mechanism is available under Solomon Islands law. The core AML statute, the Money Laundering and Proceeds of Crime Act 2002 as amended in 2010 (MLPCAA 2010), predates the FATF Recommendation 15 standard for virtual assets and contains no VASP-specific provisions. Money laundering is criminalised under section 17 of the MLPCAA 2010, and terrorist financing under section 6 of the Counter Terrorism Act 2009, but neither statute extends supervisory obligations or registration requirements to crypto businesses. There is no domestic Travel Rule regime requiring VASPs to collect and transmit originator and beneficiary information on virtual asset transfers. Operators that represent themselves as locally licensed should be treated with caution.

Why No Framework

Several structural factors explain the absence of a VASP regime. The economy is small, with limited financial sector capacity for new supervisory workloads on top of the ongoing CBDC pilot and Payment Systems Act 2022 implementation. The 2019 APG mutual evaluation identified broad effectiveness shortfalls in the existing AML system, meaning the CBSI and SIFIU are still addressing foundational supervisory gaps before adding a new asset class. Pacific regional bodies have not converged on a shared framework equivalent to the European Union’s Markets in Crypto-Assets Regulation or the Eastern Caribbean Currency Union’s approach, leaving each island nation to legislate independently. The CBSI’s stated strategic focus is on financial inclusion through mobile money and the Bokolo Cash CBDC rather than private crypto facilitation. The IMF’s Article IV consultations have not generated specific crypto policy commitments from the government.

What Operators Should Know

Any business seeking to offer crypto services to Solomon Islands residents must rely on the legal grey area created by the absence of an express prohibition. There is no licence to apply for and no regulator with a stated mandate to approve crypto businesses. General AML obligations under the MLPCAA 2010 apply to financial institutions and cash dealers broadly defined; whether crypto platforms fall within these definitions has not been authoritatively tested. The next APG mutual evaluation cycle, which will assess FATF Recommendation 15 compliance more rigorously, is expected to create pressure for legislative reform. Operators should monitor parliamentary developments and CBSI public communications for any VASP bill or consultation process, and should engage local legal counsel before commencing activity.

Market Characteristics

Adoption Patterns

Adoption of private cryptocurrency is negligible in absolute terms. There are no domestic exchanges, no licensed custodians, and no published statistics indicating meaningful retail volumes. The relevant retail digital finance story is mobile money rather than crypto: the M-Selen service launched in 2023 and has achieved significant household penetration in a short period, supported by remittance corridors to Australia and New Zealand and an expanding agent network. Cryptocurrency serves at most as a marginal value transfer channel for individual users with access to offshore platforms, predominantly through mobile internet connections rather than desktop infrastructure.

Industry Focus

There is no domestic crypto industry. The CBSI’s strategic focus is on financial inclusion, digital identity, and the Bokolo Cash CBDC pilot, all of which operate on permissioned ledger technology or conventional rails rather than open public networks. The Pacific region illustrates a wide spectrum of approaches: Vanuatu has enacted a VASP licensing regime; the Marshall Islands experimented with a sovereign digital currency; Papua New Guinea and Fiji have issued central bank warnings without licensing frameworks. The Solomon Islands sits at the more cautious end on private crypto while leading regionally on CBDC experimentation.

Regulatory Evolution

The trajectory through 2026 is one of digital payments modernisation rather than imminent private crypto rulemaking. The Payment Systems Act 2022 and CBSI Amendment Act 2023 are the two significant recent legislative steps, both directed at the formal financial system and the CBDC rather than private virtual assets. No VASP bill has been listed on the parliamentary agenda, and there is no published timeline for a crypto-specific regulatory framework. The most probable near-term sequence is continued Bokolo Cash pilot work, implementation of Payment Systems Act regulations, possible expansion of the sandbox concept, and eventual transposition of FATF virtual asset standards into national AML rules ahead of the next APG mutual evaluation cycle.