The question of the legality of cryptocurrencies in Vanuatu requires a detailed answer. The short answer is — yes, cryptocurrency activity in Vanuatu is legal, but it does not exist in a vacuum. Instead of a complete absence of regulations or the creation of a special, separate crypto law, Vanuatu has taken the path of integration. The island nation has applied its existing, fairly strict financial legislation to regulate the digital asset industry.
This pragmatic approach distinguishes Vanuatu from many other offshore zones. There is no gray area here. Instead, operators receive a clear legal status, which is critically important for building a long-term and trustworthy business. For crypto startups, exchanges, or custodial services, this means the necessity of obtaining a financial dealer’s license. The process is overseen by the country’s main financial regulator, which ensures compliance with international standards.
Status of digital assets: Legal, but not legal tender
It is important to make a fundamental distinction. When asked whether cryptocurrency is legal, two concepts are often confused: ownership rights and the status of legal tender.
In Vanuatu, cryptocurrencies are not considered legal tender. The official currency of the country remains the Vatu (VUV). You cannot use Bitcoin or Ethereum to pay taxes, government fees, or as an official means of payment recognized by the state on par with fiat currency. The Reserve Bank of Vanuatu (RBV) has repeatedly emphasized this position, warning the public about the risks associated with the volatility and lack of sovereign backing of digital assets.
However, from the perspective of property rights and business operations, the situation is different. Ownership, purchase, and sale of digital assets by private individuals are not prohibited. Moreover, the provision of services related to digital assets is legalized and regulated. The government has recognized that the virtual assets industry is a growing sector of the global economy. Instead of banning it and driving it underground, Vanuatu has decided to regulate it by applying standards similar to those used for traditional securities.
How does VFSC control the crypto sector?
The central body responsible for overseeing and licensing crypto business in Vanuatu is the Vanuatu Financial Services Commission. This is an independent regulator that supervises the entire non-banking financial sector. Its mandate covers trust services, insurance, fund management, and, most importantly for our topic, securities dealers.
The key point in Vanuatu’s approach is the absence of a separate Law on crypto assets. Regulatory magic happened through the interpretation of existing legislation. VFSC used the Financial Dealers Licensing Act [CAP 70] (FDLA).
Several years ago, VFSC issued an official clarification that became the cornerstone of regulation. In this document, the Commission specified that for the purposes of FDLA, digital assets and virtual assets should be considered as a subcategory of securities.
This decision had far-reaching consequences. It automatically meant that any company conducting business with these assets — buying, selling, exchanging, storing them on behalf of clients, or managing them — fell under the scope of the FDLA. Thus, instead of creating a new regulatory sandbox from scratch, VFSC placed the crypto business into an already existing, mature, and understandable legal framework.
What types of activities require a license
Since digital assets are equated to securities, any commercial activity with them requires obtaining a Financial Dealer License (FDL). This is not some easy registration; it is a full-fledged financial license that imposes serious obligations on its holder.
This license is necessary for a wide range of operations that form the foundation of practically any crypto project. The regulatory perimeter covers not only obvious types of activities but also many related services. If your company plans to provide at least one of the following services to a global audience while being based in Vanuatu, obtaining an FDL license is mandatory:
Management of a cryptocurrency exchange
Creation of a platform for trading (both crypto-to-crypto and crypto-to-fiat) on behalf of clients;
Custodial services
Storage of private keys or digital assets for third parties (i.e., management of a custodial wallet);
Brokerage operations
Execution of orders for the purchase or sale of cryptocurrencies on behalf of clients;
Digital Asset Portfolio Management
Making investment decisions and managing client funds denominated in cryptocurrency;
Consulting services
Providing financial advice related to investments in specific digital assets;
Conducting ICO/STO
Issuance of new tokens, which by their characteristics (for example, the promise of profit) meet the definition of a security.
Essentially, any intermediary model in the world of crypto-assets requires authorization from the VFSC. Conducting such activities without a license is a direct violation of Vanuatu law.
Supervision and regulatory obligations
Obtaining an FDL license is not the finish line but the start. VFSC conducts constant supervision of its licensees, paying special attention to client protection and the prevention of financial crimes. Vanuatu’s supervisory system is based on international standards, primarily on FATF recommendations.
Vanuatu is a member of the Asia-Pacific Group on Money Laundering (APG), a regional body similar to FATF. This imposes obligations on the country to implement strict measures against money laundering (AML) and countering the financing of terrorism (CFT).
For a licensed crypto company, this means that it must develop, implement, and strictly adhere to comprehensive internal policies. VFSC oversight focuses on how effectively the company fulfills these requirements.
To comply with the regulator’s standards, the licensee is required to establish a reliable compliance infrastructure. These obligations are not merely a formality but a daily operational task. Key requirements include:
- Appointment of responsible persons: The company must have a qualified Compliance Officer and a Money Laundering Reporting Officer (MLRO) who is responsible for the entire AML program;
- KYC/CDD procedures: Implementation of a strict Know Your Customer (KYC) policy, including the collection and verification of identification data of all users (passport, address confirmation);
- Enhanced Due Diligence (EDD): Application of enhanced verification measures for high-risk clients, such as Politically Exposed Persons (PEP) or clients from high-risk jurisdictions;
- Transaction monitoring: Using software (including blockchain analysis tools) to monitor all transactions for suspicious activity, such as structuring amounts or transfers to known sanctioned addresses;
- Filing reports (SAR): The obligation to immediately report any suspicious activity to the Financial Intelligence Unit of Vanuatu (FIU).
- Regular staff training: All employees working with clients or transactions must undergo regular training on AML/CFT.
Security deposit
To weed out unscrupulous or financially unstable operators, the Law on Licensing Financial Dealers establishes a significant financial barrier — a guarantee deposit.
Each applicant for an FDL license is required to make a deposit of 5,000,000 Vatu (VUV). This amount is equivalent to approximately 45,000 – 50,000 USD, depending on the current exchange rate.
It is important to understand the nature of this payment. This is not authorized capital that can be used for operating expenses such as office rent or marketing. This is specifically a deposit that is held by the regulator (or in a special account approved by VFSC) for the entire duration of the license validity.
This deposit serves two purposes:
- Seriousness filter: It demonstrates to VFSC that the founders have the necessary resources and serious intentions.
- Protection of clients: In case of fraud or the company’s failure to fulfill its obligations, these funds may be used to compensate losses to affected clients.
The presence of this requirement significantly enhances the authority of the jurisdiction and trust in companies that have successfully undergone licensing.
A pragmatic and regulated approach
So, returning to the original question: is cryptocurrency legal in Vanuatu?
Absolutely yes. Vanuatu has legalized activities related to digital assets but has done so in a mature and responsible manner. Instead of declaring a free zone without rules, the country integrated crypto business into its existing and reputable financial regulatory framework.
For crypto entrepreneurs, this creates a predictable and legitimate environment. Obtaining a financial services dealer license from VFSC transforms a startup from an unregulated offshore operator into a full-fledged financial company. This opens doors for establishing relationships with banks, payment systems, and institutional investors, who increasingly require their partners to have a clear regulatory status.
The approach of Vanuatu is a balance between attracting innovative business and adhering to global compliance standards.
Ready to legalize your crypto business in a reputable jurisdiction?
Navigation through VFSC requirements, preparation of a comprehensive business plan, and development of AML policies require deep legal expertise. Our team specializes in supporting fintech projects in Vanuatu.
Contact us today for an initial consultation. We will help you evaluate your business model, prepare a complete set of documents, and successfully guide you through the entire process of obtaining a financial services dealer license.
