As the United States passes landmark crypto legislation—including the GENIUS Act for stablecoins and the CLARITY Act for digital asset markets—it sends a clear signal: digital assets are here to stay, and effective regulation is no longer optional. For Somalia, this global momentum is not just relevant—it is imperative.
Somalia already functions within a digital-first financial environment. Over 80% of the population relies on mobile money platforms, while remittances from the Somali diaspora exceed $2 billion annually—accounting for over 20% of GDP. Yet despite these conditions, Somalia still lacks a formal legal framework for digital assets.
That gap is no longer sustainable.
Legal Authority Exists at the Federal Level
Under the Provisional Constitution (2012), the Federal Government of Somalia holds exclusive authority over monetary policy and financial regulation. The Central Bank of Somalia (CBS), re-established by Law No. 130 of 2011, is legally empowered to:
- License and supervise financial institutions,
- Promote monetary stability, and
- Regulate national payment systems, including future digital asset infrastructure.
This legal mandate is clear—and it belongs solely to the federal government. No federal member state can independently legislate monetary issues. Digital assets fall squarely within this jurisdiction.
The Market Is Already Here
Somalia is not waiting to go digital—it already has. Key players in the financial and tech sectors have moved forward:
· Salaam Bank officially launched a USDT (Tether) service, becoming the first Somali bank to offer blockchain-based stablecoin transactions for customers.
· Taran App is actively providing integrated digital asset services, connecting all major mobile money platforms in the country and offering a practical gateway to stablecoins and crypto wallets.
· Binance, the world’s largest crypto exchange, is also present in the Somali market. While local banks do not yet issue crypto-linked cards directly, Binance cards can be accepted via banking channels, signaling a growing fintech bridge between Somalia and global crypto ecosystems.
These developments confirm that the infrastructure, demand, and innovation are already in motion. What’s missing is a legal framework to ensure safety, accountability, and opportunity.
A U.S.-Anchored Opportunity
Somalia's use of the U.S. dollar as its de facto legal tender makes American regulatory models especially relevant. The GENIUS Act, for instance, mandates full reserve backing, licensing of stablecoin issuers, and regular audits—all provisions Somalia could adopt to regulate USD-backed digital assets used in remittances and consumer payments.
Aligning Somalia’s digital asset legislation with U.S. standards would not only provide legal clarity, but also enhance international financial credibility—particularly with institutions like the Financial Action Task Force (FATF).
Institutional Progress Is Already Underway
Somalia has made meaningful regulatory strides:
- The National Payment System (NPS), launched in 2021, supports formalized digital payments.
- The CBS issued Mobile Money Regulations in 2023—the country’s first formal effort to oversee digital finance.
- Somalia works closely with the World Bank and IMF on modernizing public financial systems, including salary, tax, and customs digitization.
These developments form a strong base from which to expand into digital asset legislation.
Public Demand and Practical Readiness
Over 80% of Somalis use mobile wallets like Hormuud’s EVC Plus. Remittances exceed 20% of GDP, and digital platforms are already handling these transactions informally. By 2025, Somalia had 10.7 million internet users (55.2% of the population), 11.3 million mobile connections, and growing 4G/5G coverage—driven by low data costs.
This ecosystem is ripe for regulated use of stablecoins and digital asset platforms. Improved connectivity allows enforcement of KYC, consumer protection, and audit standards through digital means.
Challenges That Must Be Addressed
While the potential is real, the risks are too:
· Somalia lacks a capital markets authority or specialized enforcement body for blockchain oversight.
· Fragmentation between federal and member states (e.g., Puntland) could hinder legal harmonization.
· The country remains on the FATF grey list, requiring strict AML/CFT compliance to avoid financial exclusion.
Digital asset regulation must therefore be accompanied by capacity building and robust digital oversight tools.
Global Models to Guide Somalia
- GENIUS Act (U.S.) – A stablecoin framework suited to Somalia’s USD-based economy.
- EU MiCA – A comprehensive model for digital asset licensing and consumer protection.
- Nigeria & Kenya – Regional examples of pilot programs, policy shifts, and sandbox testing that Somalia can learn from.
Final Word
Somalia’s digital economy is evolving faster than its laws. With the U.S. dollar as its monetary backbone, Somalia has a ready-made blueprint in the GENIUS Act. The Central Bank and federal authorities should act decisively, before informal digital finance systems grow beyond their reach.
This is not about keeping up—it’s about stepping forward, protecting consumers, embracing innovation, and earning credibility in a new global financial era.
The time to legislate is now.
