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Vanuatu passes cryptocurrency regulation and licensing legislation, but it is "very strict."

ChainCatcher news, according to Cointelegraph, Vanuatu has passed legislation to regulate digital assets and provide a licensing system for crypto companies wishing to operate in the Pacific island nation, which a government regulatory advisor described as "very strict."The local council passed the Virtual Asset Service Providers Act on March 26, granting the Vanuatu Financial Services Commission (VFSC) the authority to issue crypto licenses, as well as the power to enforce the Financial Action Task Force (FATF) standards for anti-money laundering, counter-terrorism financing, and travel rules on crypto companies. Under these laws, the VFSC has extensive investigative and enforcement powers and stipulates fines of up to 250 million Vatu (approximately 2 million USD) and prison sentences of up to 30 years.The law establishes a licensing and reporting framework for exchanges, NFT marketplaces, crypto custodians, and initial token offerings. Notably, the law allows banks to obtain licenses to provide crypto trading and custody services. The VFSC stated that while stablecoins, tokenized securities, and central bank digital currencies "may have some similarities with virtual assets in practice," this legislation does not affect them. The legislation also allows the VFSC commissioner to create a sandbox that permits licensed companies to offer a variety of crypto services for a period of one year, which can be renewed.In a statement on March 29, the regulatory body indicated that after years of "assessing the risks associated with virtual assets," it has developed a legislative framework that will "bring numerous opportunities" to Vanuatu and improve financial inclusion by allowing regulated services for crypto cross-border payments.
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