As countries around the world race to digitize their currencies, Vanuatu is also exploring the idea of launching a Digital Vatu — a secure, cashless version of our local currency. But how should it work?
One possible model is the GENIUS Act, a groundbreaking law recently passed in the United States to regulate stablecoins (digital versions of the US dollar). If Vanuatu were to follow this path, our eVatu could become a Pacific-first digital currency with world-class protections, security, and flexibility.
Here’s how it might look.
What Is the GENIUS Act?
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) is the first official law in the U.S. that creates strict rules for digital currencies backed by real money. In short, it allows private companies to issue digital U.S. dollars, as long as:
- They are licensed and regulated
- Every digital coin is backed 1:1 by real money
- Reserves are held safely and audited monthly
- The system protects users and avoids scams
What If Vanuatu Did the Same?
If Vanuatu copies the GENIUS Act model, we wouldn’t launch a government-issued CBDC (central bank digital currency) yet. Instead, we would approve licensed banks or fintech companies (like NBV, Vodafone, or a new startup) to issue eVatu — a digital version of the Vatu.
Here’s how it would work:
1. Private Issuer, Public Regulator
- Companies issue eVatu.
- The Reserve Bank of Vanuatu (RBV) acts as the regulator.
- Only licensed providers can participate.
This keeps innovation open, but with strict supervision.
2. Fully Backed by Real Vatu
- For every 1 eVatu, the issuer must keep 1 real Vatu in reserve.
- These reserves sit in:
- Bank accounts
- Government securities (if available)
- Possibly even foreign reserves
Your digital money is always redeemable for real money.
3. Wallets in Your Hands
- You use a mobile wallet app (Vodafone, Digicel, NBV app, etc.) to store and send eVatu.
- Pay for market goods, transport, kava — instantly.
Digital money, local life.
4. Transparent & Audited
- Issuers must publish monthly reports.
- Their reserves are audited by approved firms.
- No shady coins or fake promises.
You know your eVatu is safe.
5. No Interest — Just Utility
- Your eVatu is for payments, not for earning interest.
- Keeps the system safe and prevents banking crises.
Think cash, not savings.
6. Consumer Protections
- If the issuer fails, you get your money back first.
- Anti-fraud, anti-money-laundering, and ID verification (KYC) are enforced.
Security you can trust.
Digital Vatu vs CBDC — What’s the Difference?
| Feature | GENIUS-style eVatu | Central Bank eVatu (CBDC) |
|---|---|---|
| Issued by | Private sector | Reserve Bank of Vanuatu |
| Regulated by | RBV | RBV |
| Backed by | 1:1 in Vatu reserves | Directly by RBV |
| Pays interest? | No | Usually no |
| Designed for | Fast payments | Fast payments |
Why It Matters for Vanuatu
This model could:
✅ Bring more people into the financial system
✅ Make payments faster across islands
✅ Enable rural, offline, and low-data transactions
✅ Set the foundation for cross-border payments
✅ Keep our currency safe and modern in the digital age
Final Word
The GENIUS Act shows how a digital currency can work safely and transparently without being controlled entirely by the government. If Vanuatu follows a similar path, the eVatu could become one of the most innovative digital currencies in the Pacific — trusted, secure, and built for our unique island economy.
Let’s not be left behind. Let’s lead the digital wave 🌊
Disclaimer:
This blog post is for informational purposes only and does not constitute financial or legal advice. The views expressed are speculative and based on publicly available models such as the U.S. GENIUS Act. Vanuatu’s government or Reserve Bank has not officially adopted such a framework for a Digital Vatu at the time of writing. Readers should consult official sources or professional advisors for guidance on digital currency policy and implementation.
Mattdotvu 
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