The Federation of Bosnia and Herzegovina is preparing a sweeping overhaul of its financial rulebook, with draft laws on the capital market and virtual assets now under public consultation alongside amendments to the Factoring Act. If adopted by Parliament this autumn, the package would mark the first time that cryptocurrency trading and digital asset services are legally regulated at the entity level, while also modernizing securities markets and giving small and medium sized enterprises new tools to manage receivables. Federal Finance Minister Toni Kraljević has described the initiative as a decisive step toward a modern, safe and competitive financial market aligned with European Union standards, with the potential to attract fresh investment and expand the range of financial services available to domestic companies.
New Capital Market Rules Would Expand Investment Options
The proposed Law on the Capital Market would move the Federation well beyond its current framework, which is largely limited to stocks and bonds. Ahmed Hodžić, head of the Trading and Supervision Department at the Sarajevo Stock Exchange, said the reform would open the door to derivatives trading, money market instruments and a broader range of asset classes commonly found in global markets. Brokerage houses, which currently operate mainly as intermediaries for securities transactions, would also be able to significantly expand their services.
At the same time, a separate draft Law on Providers of Services Related to Virtual Assets and Cryptocurrencies would introduce supervision and security requirements for citizens and companies dealing in digital assets. The measure would fill a regulatory gap that has left the Federation behind Republika Srpska, where a 2022 amendment to securities legislation already gave cryptocurrencies official status as digital records of value. The reform package also includes changes to the Factoring Act, designed to help SMEs convert outstanding invoices into immediate liquidity, while work continues on a Law on the Securities and Capital Market Commission that would establish a dedicated supervisory body.
Experts say the proposed changes could significantly alter how companies access financing. Admir Čavalić, chairman of the Economic Policy Committee of the Federation’s House of Representatives, said the reform promotes liberalization, faster capital market procedures and greater integration of financial technology, including digital assets and fintech platforms. Professor Almir Alihodžić of the Faculty of Economics in Zenica added that clearer regulations could provide stronger protection for domestic and foreign investors, encouraging more companies to issue securities and helping broaden the investor base.
The Federation’s capital market currently faces outdated legislation, a limited pool of investors and insufficient transparency. An OECD report published in 2026 identified similar structural weaknesses as major obstacles to capital market development across Bosnia and Herzegovina. The organization found that while both entities provide some tax incentives for retail investment, neither has introduced a bundled tax advantaged retail account, while private equity continues to face obstacles caused by inconsistent legislation.
EU Alignment Puts Pressure on Sarajevo to Deliver
The Federation is not alone in pursuing financial market modernization. Brčko District has already begun its own capital market reform, adopting a Draft Law on the Securities Market and laying the groundwork for a new stock exchange. Republika Srpska, meanwhile, has moved forward with alternative investment funds and crypto licensing, creating competitive pressure that makes greater harmonization across Bosnia and Herzegovina increasingly important.
The Federation’s draft legislation explicitly seeks alignment with EU frameworks such as MiFID, although full adoption of the European Union’s Markets in Crypto Assets framework remains a longer term objective. If Parliament approves the package this autumn, the reforms could provide businesses and investors with a broader and more predictable financial environment while bringing the Federation closer to European regulatory standards.
With the public consultation still under way and parliamentary review targeted for September, the coming months will determine whether Sarajevo can turn its long delayed capital market ambitions into functioning legislation. The proposed capital market reform in the Federation of Bosnia and Herzegovina could ultimately reshape investment, cryptocurrency regulation and business financing across the entity.
