Vanuatu has officially implemented its regulatory framework for cryptocurrencies and licensing, becoming part of an expanding group of countries that are establishing oversight for virtual asset service providers.
The nation has completed its crypto regulatory and licensing system, which has been under development since 2020. On March 26, Vanuatu’s Parliament approved the Virtual Asset Service Provider Act, granting the Vanuatu Financial Services Commission the responsibility to issue licenses and oversee the crypto sector.
The new legislation allows the VFSC to issue licenses to various entities, including exchanges, NFT marketplaces, and custody service providers. Additionally, it enables banks to receive licenses for offering crypto exchange and custody services. However, the legislation does not encompass stablecoins, tokenized securities, or central bank digital currencies.
The framework also permits the commissioner to establish a sandbox environment, allowing approved companies to operate as virtual asset service providers for an initial period of one year, subject to potential renewal.
Vanuatu joins an increasing number of nations that have recently introduced or revised their regulatory frameworks for cryptocurrencies and licensing.
Earlier this month, the Cayman Islands, another prominent offshore financial center known for its favorable tax conditions, updated its crypto licensing regulations, requiring VASPs to secure a license from the Cayman Islands Monetary Authority starting April 1.
On March 25, Taiwan’s Financial Supervisory Commission revealed the draft for its VASP legislation, detailing licensing requirements for crypto asset service providers, standards for stablecoin issuance, and various measures for investor protection. Turkey also took significant steps on March 13 by implementing stricter regulations for crypto asset service providers.