Summary
- GFSO's published licensing process makes a bank account in GMC a precondition of the In-Principle Approval (IPA): the licence issues only after incorporation, a bank account, regulatory capital, office space and key hires are in place.
- The account therefore has to be opened while the firm is an applicant, not a Licensed Firm. What a bank will test is whether the applicant already behaves like one.
- The Royal Charter No. 1 of 2024, Art. 4 provides for GMC's own central bank; banks in GMC are Licensed Firms carrying on "Accepting Deposits" (Financial Services Act 2025, Sch. 1, para. 38) and must themselves run financial-crime controls under GEN Rulebook 3.3.38–3.3.40.
- A bankable file mirrors GEN 5.2.7–5.2.11: fit and proper controllers, a credible business plan, an appointed MLRO, documented systems and controls, and a token policy that excludes what s. 5A(4) bars.
- Keeping the account depends on the same things: records reproducible within three business days (GEN 3.3.34), prompt notification of significant events (Principle 10, GEN 2.2.10), and no misrepresentation of regulatory status (GEN 4.4.1).
Why the bank account is a licensing issue, not just an operational one
The Gelephu Financial Services Office (GFSO) describes its licensing process in seven steps: an initial meeting, presentation of the business model, submission of the application with a non-refundable fee, review with interviews, an In-Principle Approval (IPA) with preconditions, satisfaction of those preconditions, and issue of the Financial Services Licence. The preconditions listed include incorporation through the Gelephu Corporate Registration Office (GCRO), "opening a bank account in GMC", injecting the required regulatory capital, securing office space and hiring key personnel.
The order is deliberate. Regulatory capital has to be injected somewhere, and in practice that means a GMC bank account in the name of the incorporated applicant. A digital asset firm that cannot open an account cannot satisfy its IPA and cannot be licensed. Banking is not the step after licensing; it is on the critical path to it.
This article does not name or recommend any bank. It explains what the GMC statutory framework requires of a digital asset firm, because that framework is what a bank's own onboarding function will test against. "$" means United States dollars throughout (Companies Act 2025, s. 4A).
Who the banks are, legally
The Royal Charter No. 1 of 2024 requires the GMC Authority to establish administrative and regulatory bodies "including a central bank" (Art. 4). Commercial banking in GMC is a Regulated Activity: "Accepting Deposits" is specified in Schedule 1, para. 38 of the Financial Services Act 2025, and a bank is a Licensed Firm holding a Financial Services Licence for that activity. Banks are also expressly required to appoint a Finance Officer as an Approved Person, a requirement that applies to "banks and insurers only" (GEN 5.5.1(1)(b)).
That matters for a crypto applicant in two ways. First, a GMC bank is subject to the same GEN Rulebook the applicant will be subject to. It must "establish and maintain effective systems and controls" to deter and prevent fraud and other Financial Crimes and to report them (GEN 3.3.38), and in doing so must consider "its Clients, product and activity profiles", "its distribution channels" and "the complexity and volume of its Transactions" (GEN 3.3.40). A digital asset client is, by definition, a client whose product and activity profile the bank must assess. Second, "Financial Crime" is defined in the Act to include fraud or dishonesty, market misconduct, "handling the proceeds of crime" and the financing of terrorism. The bank's questions about source of funds are a statutory obligation on the bank, not a preference.
What the framework requires of you, which is what the bank will ask for
The bank does not licence you. But the bank knows what GFSO will require, and an applicant that already meets GEN's licensing tests is an easier decision. GEN 5.2.7 requires an applicant to demonstrate that it "has adequate and appropriate resources, including financial resources", "is fit and proper", "is capable of being effectively supervised" and "has adequate compliance arrangements". Each maps onto an onboarding question.
1. Fit and proper controllers and governing body
GFSO assesses "the fitness and propriety of the members of its Governing Body", "the suitability of the applicant's Controllers", and "any matter which may harm or may have harmed the integrity or the reputation of the Regulator or GMC, including through the carrying on of a business by the applicant for a purpose connected with a Financial Crime" (GEN 5.2.9(1)(a), (c), (i)). Controllers must complete information "in such form as the Regulator shall prescribe" (GEN 5.2.6, Guidance). Prepare the same package for the bank: ownership chart to ultimate beneficial owners, source-of-wealth narratives for each controller, and identity documents. Where wealth is crypto-derived, the narrative should trace it to identifiable on-chain and off-chain events, because "handling the proceeds of crime" is the definition the bank is screening against.
2. A business plan that explains the flows
GEN 3.3.16 requires a Licensed Firm to produce a business plan, and GEN 5.2.8(1)(d) directs GFSO to consider "the rationale for, and basis of, the applicant's business plan". A bank wants the same document with a payments overlay: which Regulated Activities will be carried on (dealing, custody, arranging, operating an MTF, issuing a Fiat-Referenced Token), who the clients are, whether they are Retail or Professional Clients, where fiat enters and leaves, and how fiat and tokens are segregated. If the firm will provide money services, note the exclusion in Sch. 1, para. 53 for money services that are "a necessary part" of another Regulated Activity, and be ready to explain whether the fiat legs are that or a stand-alone payment business.
3. Systems and controls that exist before day one
GEN Chapter 3 applies to every Licensed Firm. The bank will expect to see the core of it already drafted: apportionment of significant responsibilities among directors and senior managers, recorded in writing (GEN 3.2.1, 3.2.3); segregation of key duties (GEN 3.3.3); risk management systems and a named individual advising the Governing Body on risk (GEN 3.3.4–3.3.6); compliance arrangements with documented monitoring (GEN 3.3.7–3.3.12); an internal audit function (GEN 3.3.13); business continuity arrangements that are tested, including for data centres and infrastructure dependencies (GEN 3.3.33); and records "capable of reproduction on paper within a reasonable period not exceeding three Business Days" (GEN 3.3.34(2)), in English (GEN 3.3.36). For a crypto firm, the continuity and records rules translate into key-management, wallet-recovery and transaction-reconstruction procedures.
4. An MLRO and an AML programme
Every Licensed Firm must appoint, as Approved Persons, a Senior Executive Officer, a Compliance Officer and a Money Laundering Reporting Officer (GEN 5.5.1(1)), and those individuals must be resident in GMC or Bhutan (GEN 5.5.2), subject to waiver for the Compliance Officer and MLRO on a case-by-case basis. The MLRO is a director, partner or senior manager "who has responsibility for the implementation of a Licensed Firm's anti-money laundering policies, procedures, systems and controls and day to day oversight of its compliance with the Rules in AML" (GEN 5.3.8). The AML and Sanctions Rulebook is one of the rulebooks published by the Gelephu Financial Services Office. A bank will want the MLRO named, the AML manual drafted, and the transaction-monitoring and blockchain-analytics tooling identified, before the account opens (see our guide to AML, sanctions and beneficial ownership in GMC).
5. A token policy that respects the Act
Section 5A(4) of the Financial Services Act 2025 provides that no person may carry on a Regulated Activity in GMC involving the issue, sale, purchase, transfer or custody of a Virtual Asset or Fiat-Referenced Token "which is an algorithmic stablecoin token, a privacy token, or any digital asset employing similar technology". Licensed Firms conduct Regulated Activities only in "Accepted Virtual Assets", those GFSO considers meet its requirements (s. 5A(1)), and GFSO may by Direction prohibit dealings in a specified token (s. 5B). A written token-listing policy that excludes privacy and algorithmic-stablecoin tokens, and that describes how the firm assesses acceptance, answers a question the bank must ask.
6. Client asset arrangements
Principle 9 requires a Licensed Firm that "has control of or is otherwise responsible for assets or money belonging to a Client" to "arrange proper protection for them" (GEN 2.2.9). A bank opening accounts for a custodian or exchange will want to understand which accounts hold the firm's own money and which hold client money, and how the two are segregated. The Conduct of Business Rulebook governs client assets in detail; the bank account structure should be designed against it from the outset.
7. Location and substance
A Licensed Firm incorporated in GMC must have its head office and registered office in GMC (GEN 4.5.1(1)), and GFSO will look at "the location of its Directors, Partners and Senior Management and ... the main location of its day-to-day operational, control, management and administrative arrangements" (GEN 4.5.1, Guidance). Every GMC company must also have at least one director ordinarily resident in GMC (Companies Act 2025, s. 145(1)). A bank will expect the same: a real office, resident signatories and a resident MLRO.
Keeping the account open
Opening is the first test. Keeping the account depends on behaving like a Licensed Firm under supervision.
- Do not misstate your status. GEN 4.4.1 forbids a Licensed Firm from misrepresenting its status "expressly or by implication", and prescribes the disclosure "Regulated by the GMC Gelephu Financial Services Office" for key business documents. An applicant holding only an IPA must not describe itself as licensed to its bank or its customers. Section 19A of the Act separately prohibits misleading or deceptive conduct in relation to a Virtual Asset or Regulated Activity by anyone, licensed or not.
- Tell the regulator, then the bank. Principle 10 requires a Licensed Firm to "keep the Regulator promptly informed of significant events" (GEN 2.2.10), and GEN 5.2.1 requires an applicant to inform GFSO in writing "without delay" of any material change while the application is under consideration. A change of controller (GEN 8.8), a change of scope (GEN 8.3) or a departing MLRO (GEN 8.5–8.7) should reach the bank at the same time.
- Keep the records. GEN 3.3.34 records, reproducible within three business days, are what a bank will ask for when it reviews a transaction. Wallet-level ledgers reconciled to chain data are the crypto equivalent.
- Handle complaints. GEN Chapter 7 requires complaints-handling procedures for Retail Clients; a pattern of unresolved customer disputes is a de-risking trigger.
- Pay staff correctly. Salary is payable in legal tender or into an account at a bank licensed in GMC (Employment Act 2025, ss. 54, 63(1)(a)); paying employees in tokens requires the written consent and designated-officer approval route in s. 63(1)(c). Employers must deduct tax at source (Income Tax Act 2025, s. 44B).
Tax and exchange of information: what the bank will assume
The Income Tax Act 2025 contains a Part 20A on exchange of information and a Part 20B on international tax compliance agreements (ss. 105I–105Q). Deposit interest earned by a non-resident individual, or by a non-resident person without a permanent establishment in GMC, from an approved bank in GMC is exempt (s. 13(1)(t)), and interest derived by any individual from a deposit with an approved bank is exempt (s. 13(1)(zd)). The firm itself pays 15% on chargeable income (s. 43(1)(a)). None of that changes the bank's obligation to identify the account holder and its controllers; a firm should expect its tax residence and controllers' residence to be recorded at onboarding.
Practical checklist / Next steps
- Incorporate through GCRO with a resident director (Companies Act 2025, s. 145) before approaching a bank; the account must be in the applicant's name.
- Assemble the controllers' file: ownership chart, source-of-wealth narratives, identity documents, in the form GFSO prescribes (GEN 5.2.6).
- Finalise the business plan with fiat and token flow diagrams (GEN 3.3.16; 5.2.8(1)(d)).
- Name the SEO, Compliance Officer and MLRO (GEN 5.5.1) and draft the AML manual and token-listing policy (s. 5A(4)).
- Draft the GEN Chapter 3 core: responsibilities map, risk framework, compliance monitoring, continuity plan, records policy.
- Design the account structure around client-asset segregation (GEN 2.2.9; COBS).
- Open the account, inject regulatory capital, and evidence both to GFSO to satisfy the IPA.
- After licensing, keep the bank informed in step with GFSO notifications (GEN 2.2.10, 8.3, 8.5–8.8).
Frequently asked questions
Can a crypto firm get its GFSO licence first and open a bank account afterwards?
No. GFSO's published process lists opening a bank account in GMC among the IPA preconditions that must be satisfied before the Financial Services Licence issues. The account, capital injection, office and key hires all come between IPA and licence.
What does a bank in GMC have to check about a crypto client?
A GMC bank is a Licensed Firm bound by GEN 3.3.38–3.3.40 to maintain systems that identify, assess and manage Financial Crime risk by reference to its clients' product and activity profiles and transaction complexity. It is also bound by the AML and Sanctions Rulebook. Its questions about controllers, source of funds and token flows follow from those rules.
Which tokens will cause a problem?
Section 5A(4) bars any Regulated Activity in GMC involving an algorithmic stablecoin token, a privacy token or similar technology. A token policy that excludes those, and that explains how the firm assesses whether a token is an Accepted Virtual Asset, should be in the onboarding file.
Who has to be resident in GMC?
At least one director of the company (Companies Act 2025, s. 145(1)), and the Senior Executive Officer, Compliance Officer and MLRO under GEN 5.5.2, with a possible waiver for the latter two. The firm's head office must be in GMC (GEN 4.5.1).
Key takeaways
- The bank account is on the critical path to the licence: it is an IPA precondition.
- Banks in GMC are Licensed Firms with their own statutory Financial Crime duties; their diligence follows GEN 3.3.38–3.3.40.
- Build the GEN 5.2.7–5.2.11 licensing case first; the same file is the banking file.
- Exclude s. 5A(4) tokens, name the MLRO, segregate client assets, and keep records reproducible within three business days.
- Never describe an IPA as a licence (GEN 4.4.1; s. 19A).
This article is general information about the law of the Gelephu Mindfulness City Special Administrative Region as at the date above. It is not legal advice and does not create a lawyer–client relationship.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
References
- Royal Charter No. 1 of 2024, Art. 4
- Financial Services Act 2025, ss. 5A, 5B, 19A; Schedule 1, paras. 38, 53
- GEN Rulebook 2026, Rules 2.2.9, 2.2.10, 3.2.1, 3.2.3, 3.3.3–3.3.16, 3.3.33, 3.3.34, 3.3.36, 3.3.38–3.3.40, 4.4.1, 4.5.1, 5.2.1, 5.2.6–5.2.11, 5.3.8, 5.5.1, 5.5.2, 8.3, 8.5–8.8; Chapter 7
- Companies Act 2025, ss. 4A, 145
- Employment Act 2025, ss. 54, 63
- Income Tax Act 2025, ss. 13(1)(t), 13(1)(zd), 43(1)(a), 44B, Parts 20A and 20B
