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VIRTUAL ASSETS BOOST VFSC REVENUE AS COMMISSION DELIVERS RECORD VT363 MILLION TO GOVERNMENT

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Virtual assets are playing an increasingly important role in Vanuatu’s financial future, contributing to the Vanuatu Financial Services Commission’s (VFSC) record VT363 million revenue share payment to the Government for the 2024 financial year. At a handover ceremony on Wednesday, 14 May 2025, VFSC Commissioner Branan Karae presented the final quarter cheque of VT149 million to Deputy Prime Minister and Minister of Finance, Hon. Johnny Koanapo. Commissioner Karae noted that while virtual asset regulation under the new Virtual Assets Service Providers (VASP) Act is only one part of VFSC’s revenue streams, it has positioned Vanuatu as a jurisdiction of interest for emerging financial services, alongside traditional revenue sources such as licensing, compliance, and company registrations.

Hon. Koanapo congratulated the VFSC for its outstanding performance and praised its proactive steps to support economic growth through innovative policies. He highlighted the importance of new sectors like virtual assets in helping to broaden the national revenue base and called on other institutions to explore similar opportunities. The Minister underscored the country’s urgent need for financial resources to meet development goals and acknowledged VFSC’s leadership in building a modern, resilient, and internationally relevant financial regulatory environment.

Photo: A banner from the 2023 VFSC Symposium prominently displays the theme “Virtual Assets,” highlighting Vanuatu’s growing role in digital asset regulation and innovation under the VFSC framework.

HISTORY OF VIRTUAL ASSETS IN VANUATU

Pre-2020: Early Interest & Global Shifts

  • Vanuatu’s financial sector remained focused on traditional offshore services.
  • Globally, virtual assets (like Bitcoin) were gaining traction; Vanuatu observed with interest but lacked a defined policy or regulation.

2020–2021: Recognition of Emerging Trends

  • The Vanuatu Financial Services Commission (VFSC) began exploring digital assets as part of broader financial innovation.
  • Discussions started around blockchain technology and virtual asset service providers (VASPs), driven by increased international scrutiny (e.g., FATF guidelines on crypto).

2022: First Public Moves

  • VFSC started engaging with stakeholders to develop a regulatory framework for virtual assets.
  • Internal consultations and capacity-building workshops were held to prepare the Commission for digital finance oversight.

2023: Foundation Laid

  • The Class D License category was introduced by the VFSC, requiring applicants to already hold Class A, B, and C licenses. This was aimed at preparing for more advanced financial services such as virtual assets and digital exchanges.
  • TMGM, a global broker, expressed interest and sponsored the VFSC Virtual Assets Symposium, signaling industry buy-in.

2024: Legal Framework Established

  • The Virtual Assets Service Providers Act was drafted and enacted by VFSC.
  • It established a legal framework aligned with FATF recommendations, covering:
    • Anti-money laundering (AML)
    • Combating financing of terrorism (CFT)
    • Licensing and compliance standards
  • The Act positioned Vanuatu as an emerging regulated hub for digital asset services in the Pacific.

2025: Implementation and Impact

Virtual assets are now recognized as a key revenue stream in the government’s fiscal plans.

The VFSC began granting licenses under the new Act.

The Virtual Assets Symposium 2025 gathered stakeholders, brokers, and government officials to promote compliance and attract investment.

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