Vanuatu Congress passes cryptography

Vanuatu has become the latest country with a proper legal framework for cryptocurrency, as Congress passed the Virtual Asset Service Provider (VASP) Act last week. Currently, virtual assets are defined domestically as “a digital representation of value that acts as a medium of exchange, unit of accounts, or store of value.”

However, the Act does not cover the digital representation of national digital currencies, including FIAT currencies, securities and central bank digital currencies (CBDCs). The announcement further emphasized that despite regulations, cryptocurrencies are not domestic fiat currencies.

“However, VFSC acknowledges that virtual assets and cryptocurrencies have ‘value’ because they can be exchanged for other assets that have other assets, despite their reliance on supply and demand in the market,” the press release states.

Appropriate Cryptographic Regulation Framework

Vanuatu completed the legal framework of cryptocurrency several years after the Vanuatu Financial Services Commission (VFSC) began efforts in this particular area. VFSC will become the agency that regulates the local crypto industry.

Island Cryptography further ensures compliance with international standards, including the Financial Conduct Task Force (FATF) “Travel Rules” policy. With the introduction of appropriate laws that the crypto industry should follow, Vanuatu hopes to “open many opportunities both economically and socially.”

“Economically, the VASP Act establishes a stable regulatory framework for digital business transactions,” the announcement added. “This will promote healthy competition, attract investment, reduce business costs, and ensure consumer protection. It also offers many potential benefits, including the potential to improve financial inclusion, including speed, low cost and increased efficiency when conducting virtual asset transactions, including cross-border payments.”

Offshore jurisdictions aim to attract cryptography

Earlier this month, the Cayman Islands updated its cryptographic regulations and introduced new licensing rules through legislative reforms. Starting April 1, 2025, entities providing virtual asset protection and trading platform services on or on the island must obtain a license.

Interestingly, both Vanuatu and the Cayman Islands are Difference (CFD) Broker Contracts (CFD) Brokers as they obtain popular offshore destinations for forex and licenses to provide services globally from these jurisdictions. Now, these islands aim to follow the same approach to attract crypto companies. Meanwhile, Vanuatu in 2023 mandated brokers operated from the island to have a track presence.