Crypto-funded debit card in Vanuatu

Virtual Asset Providers Act No. 27 of 2023 (VAPA 2023): This is the cornerstone legislation for virtual assets, including custody services. It defines "virtual assets," "virtual asset service providers" (VASPs), and sets out licensing and operational requirements.

Vanuatu Financial Services Commission - Virtual Asset Providers Act No. 27 of 2023 (PDF link on VFSC website)

Financial Dealers Licensing Act [CAP 70]: While the VAPA 2023 is specific, the general principles and licensing framework of financial dealing can be considered complementary.

Anti-Money Laundering and Counter-Terrorism Financing Act No. 13 of 2017 (as amended):

Application Requirements (Section 12, VAPA 2023): An applicant for a VASP license must submit to the VFSC:

Capital Requirements (Section 18, VAPA 2023): A VASP must at all times maintain a minimum unimpaired paid-up capital as prescribed by the Minister through regulation. This regulation is yet to be fully detailed.

Fit and Proper Persons (Section 14, VAPA 2023): Directors and senior management must meet "fit and proper" criteria established by the VFSC, demonstrating competence, integrity, and financial soundness.

Client Assets (Sections 20, 21, 22, VAPA 2023):

Risk Management and Internal Controls (Section 19, VAPA 2023): A licensed VASP must implement robust risk management systems and internal controls designed to ensure the security, integrity, and operational resilience of its services, which could implicitly encourage or require consideration of insurance.

Virtual Assets: The most likely general classification is "Virtual Assets" or "Digital Assets" under the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act) [CAP 264]. This act defines "virtual asset" broadly and mandates AML/CTF obligations for Virtual Asset Service Providers (VASPs).

Virtual Asset Service Provider (VASP) Obligations: The AML/CTF Act [CAP 264] mandates that entities providing "virtual asset services" (which would include stablecoin exchanges, transfers, custody, etc.) are considered VASPs and must comply with AML/CTF obligations, including registration with the Vanuatu Financial Intelligence Unit (FIU) and implementing robust KYC/CDD procedures.

Securities: If a stablecoin offers rights akin to shares, debentures, or other investment instruments, it could potentially be classified as a security under the Financial Dealers Licensing Act [CAP 318] or the Companies Act [CAP 191]. This would depend on the specific features and rights attached to the stablecoin.

E-money/Payment Tokens: Vanuatu does not have a distinct e-money or payment token framework similar to the EU's MiCA or PSD2. If a stablecoin's primary function is as a medium of exchange, its issuance and circulation might fall under general financial services regulation or simply as a virtual asset for AML purposes, without a specific "e-money" licensing category for non-bank entities.

Financial Dealers License: Under the Financial Dealers Licensing Act [CAP 318], entities dealing in "securities" (if stablecoins are deemed such) or providing other financial services may require a Financial Dealers License from the VFSC. The VFSC website provides information on these licenses.

Financial Intelligence Unit (FIU) Reporting: Vanuatu has robust AML/CTF (Anti-Money Laundering/Counter-Terrorism Financing) regulations. Businesses involved in crypto-asset services (e.g., exchanges, custodians, wallet providers, initial coin offering (ICO) issuers) are considered "reporting entities" under the Anti-Money Laundering and Counter-Terrorism Financing Act No. 13 of 2014.

Vanuatu VAT: Vanuatu operates a Value Added Tax (VAT) system, which applies to the supply of most goods and services in Vanuatu. The standard VAT rate is 15%.

Fees for Services: If a Vanuatu-based business provides services related to cryptocurrency (e.g., operating a crypto exchange, offering custody services, facilitating transactions) and charges fees for these services, these fees would generally be subject to Vanuatu VAT at the standard rate of 15%, provided the place of supply rules deem the service to be supplied in Vanuatu and the business exceeds the VAT registration threshold.

Reserve Bank of Vanuatu Statement on Cryptocurrencies (November 2022)

Business License Renewals: All businesses operating in Vanuatu, regardless of their industry, must hold and periodically renew a business license, for which fees apply.