Vanuatu has enacted a new law to regulate crypto companies, described as 'very stringent.'
New Laws and Their Impact
The Vanuatu Parliament passed the Virtual Asset Service Providers Act on March 26, granting licensing authority to the Vanuatu Financial Services Commission (VFSC) for crypto companies. The law mandates compliance with AML/CFT and Travel Rule standards. Violations can result in fines up to 250 million vatu and imprisonment for up to 30 years.
Vanuatu's Regulatory Approach
The law establishes licensing and reporting for exchanges, NFT marketplaces, and other crypto firms. VFSC's commissioner can create a sandbox for cryptoservice experiments for a year. The law doesn't affect stablecoins and tokenized securities even though they share similarities to virtual assets.
Consequences and Opportunities for the Country
After years of assessing risks associated with virtual assets, the new law offers numerous opportunities for Vanuatu by improving financial inclusion and regulating crypto services. The law development began in 2020 but was delayed due to government changes and COVID-19.
The new laws in Vanuatu create a stringent environment for crypto companies, protecting the country from irresponsible practices and enhancing financial inclusion.
