Stablecoin issuer / redeemer in Fiji

Certain Stablecoins: While many stablecoins are designed as payment instruments, if a stablecoin is offered as an investment product with an expectation of yield or capital gains, it could be deemed a security.

Investment Tokens: Any token offered with the expectation of profit derived from the efforts of others, where the investor is largely passive. This includes:

Prospectus Requirement: Generally, an offer of securities to the public in Fiji requires the preparation and registration of a prospectus with the Registrar of Companies. This prospectus must contain all material information necessary for investors to make an informed decision.

Licensing: The issuer or any entity advising on, marketing, or facilitating the offering of such security tokens may need to be licensed as a financial services provider by the RBF or other relevant authorities, depending on the nature of their activities (e.g., an investment adviser, broker-dealer, or fund manager).

RBF Approval/Notification: For any significant capital raising, foreign exchange implications, or the introduction of new financial products, direct engagement with and potential approval from the Reserve Bank of Fiji would likely be required, especially given their cautious stance on crypto.

Regulated Markets: Trading would ideally need to occur on a licensed securities exchange or a regulated platform. Fiji's existing stock exchange (South Pacific Stock Exchange) or a future RBF-licensed entity would be the only legal avenues for trading.

Licensing for Platforms: Any platform facilitating the secondary trading of security tokens would need to be appropriately licensed as a securities exchange or a financial market operator by the RBF. Given the lack of specific crypto licenses, this would be a high bar to meet under existing legislation.

Pure Payment Tokens/Cryptocurrencies (e.g., Bitcoin, Ethereum): While the RBF does not recognise them as legal tender, if they are primarily used as a medium of exchange and not offered as an investment scheme by an issuer, they are less likely to be considered securities. However, platforms facilitating their trading would still fall under AML/CFT regulations.

Exemptions: The Companies Act 2015 provides certain exemptions from prospectus requirements, which might apply to token offerings:

Small Offers: Offers to a limited number of persons.

Sophisticated Investors: Offers made only to professional or institutional investors who meet specific criteria.

AML/CFT Compliance: Any entity (exchange, broker, OTC desk) involved in the secondary trading of virtual assets (whether securities or not) is considered a "financial institution" or "designated non-financial business and profession" under Fiji's Anti-Money Laundering and Counter-Financing of Terrorism Act 2017. They would be subject to stringent AML/CFT obligations, including customer due diligence (KYC), suspicious transaction reporting, and record-keeping.

No specific license for cryptocurrency custody exists. As cryptocurrencies are not recognized as regulated financial products under the current RBF framework, there is no specific "crypto custodian license."

No specific rules for cryptocurrency asset segregation exist. Since there is no specific regulatory framework for crypto custody, there are no mandates for how client digital assets should be segregated from the custodian's proprietary assets.

No specific insurance or bonding requirements for cryptocurrency custodians exist. Given the absence of a dedicated framework, there are no mandates for custodians to carry specific insurance policies or bonding to cover potential losses due to hacks, fraud, or operational failures.

No specific cold storage mandates exist. There are no regulatory requirements dictating the use or proportion of cold storage (offline storage) for digital assets held in custody. Industry best practices, again, would guide custodians to use a combination of hot, warm, and cold storage for security.

Financial Transactions Reporting Act 2004 (FTRA 2004): This is the foundational AML/CFT law in Fiji. It establishes the framework for reporting institutions, customer due diligence, suspicious transaction reporting, and the powers of the Financial Intelligence Unit (FIU).

Financial Transactions Reporting (Amendment) Act 2021:

Customer Identification and Verification:

Individual Customers: Obtain and verify identity using reliable, independent sources (e.g., national ID cards, passports, driver's licenses). This includes full name, date of birth, residential address, and nationality.

Legal Entities (Companies, Trusts, etc.): Obtain and verify the entity's name, legal form, proof of existence, registered address, and the names of directors/partners/trustees.

Beneficial Ownership: Identify and verify the ultimate natural person(s) who own or control the customer, or on whose behalf a transaction is being conducted. For legal entities, this typically involves identifying individuals with 25% or more ownership/control.

Enhanced CDD (EDD): Must be applied in higher-risk situations, which typically include:

Customers from high-risk jurisdictions.

Politically Exposed Persons (PEPs) and their family members/close associates.

Non-face-to-face business relationships.

Reporting Threshold: There is no monetary threshold for reporting. Any transaction (including attempted transactions), regardless of value, where the VASP suspects or has reasonable grounds to suspect involves money laundering, terrorism financing, or any other criminal activity, must be reported.

Timing: STRs must be submitted promptly to the FIU, typically within a few days of forming the suspicion.

No Tipping-Off: VASPs and their employees are strictly prohibited from "tipping off" or informing the customer or any other third party that an STR has been filed or that an investigation is underway.

Ongoing Monitoring: Continuously monitor the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes monitoring for unusual or suspicious activities.

Internal Reporting: VASPs must establish internal procedures for reporting suspicious activities to a designated AML Compliance Officer, who is then responsible for filing the STR with the FIU.

All CDD information (customer identification data, beneficial ownership information).

Types of Records: