Custodial wallet / SaaS 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)

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

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

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.

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.

Detailed cybersecurity requirements, potentially touching on cold/hot storage ratios.

A VASP must hold a client’s virtual assets separate from its own assets and the assets of other clients (Section 20(1)).

Virtual assets held by a VASP on behalf of a client are not to be used to satisfy any liability of the VASP or form part of its assets (Section 20(2)).

A VASP is prohibited from using, dealing with, or otherwise disposing of a client's virtual assets without the client's explicit consent, except as authorized by law or a court order (Section 21).

A VASP must maintain adequate records that clearly identify the ownership of each client's virtual assets (Section 22).

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.

The Reserve Bank of Vanuatu (RBV) has issued clarifications regarding the legal status of cryptocurrencies. In November 2022, the RBV reiterated that cryptocurrencies are not legal tender in Vanuatu. While this is a regulatory stance and not an enforcement action against a specific entity, it sets the legal framework within which crypto activities operate.

Reference: Anti-Money Laundering and Counter-Terrorism Financing Act [CAP 264] (accessible via PacLII: http://www.paclii.org/vu/legis/consol_act/a-mlact2019318/ - Note: This link points to the 2019 version which often incorporates previous amendments.)