Seychelles Legalizes Cryptocurrency Bill for Regulating Virtual Asset Sector
In a significant move towards fostering a secure and transparent digital asset ecosystem, the island nation of Seychelles has unanimously approved a new Virtual Assets Bill, following rising consumer complaints about crypto-related losses. The bill, presented by Finance Minister Naadir Hassan, aims to establish a comprehensive legal framework for regulating virtual asset service providers (VASPs) operating in Seychelles.
Under the new framework, VASPs will be required to set up a company under either the Seychelles Companies Act or the International Business Companies Act. Key VASP activities that will require licensing include virtual asset exchanges, brokerage, investment services, and wallet providers.
The Virtual Assets Bill in Seychelles does not address the taxation of virtual assets in Seychelles, nor does it specify any details about the penalties for non-compliance. However, the bill does factor in the FATF's recommendations, reflecting Seychelles' efforts to tighten crypto oversight and mirror a broader effort across Africa to comply with global standards set by the FATF.
The Financial Services Authority (FSA) has been designated as the regulator responsible for implementing and enforcing the Virtual Assets Bill. Applicants must demonstrate a "substantial presence" in Seychelles, including having a resident director and an adequately staffed office.
Meanwhile, Nigeria, another African nation, has introduced a regulatory sandbox for crypto, allowing licensed firms to test products under the supervision of the regulatory authorities. This pragmatic approach focuses on innovation while ensuring oversight, positioning Nigeria among several African countries developing frameworks to accommodate crypto business.
South Africa, known for its traditional steps to regulate crypto through financial sector authorities, focusing on AML and licensing frameworks, is also engaged in regulatory development. Its participation in regional sandbox initiatives suggests ongoing active development in crypto regulation. However, specific new legislation details were not indicated in the search results.
In South Africa, as of June 2024, the country has granted 138 crypto licenses, making it the African continent's most advanced crypto regulatory landscape.
In neighbouring Nigeria, the West African nation is still in the process of determining its regulatory framework for crypto. The country released a VASP rulebook in 2022, which was deemed impractical by industry experts. The new SEC chief in Nigeria is looking to make progress in the crypto regulation area, recently introducing a sandbox for crypto operating in the country.
These approaches reflect a balancing act between fostering innovation and managing risks in virtual asset markets across these African jurisdictions. As digital assets continue to gain traction, we can expect more African nations to follow suit and establish their own regulatory frameworks for virtual assets.
- The Virtual Assets Bill in Seychelles aligns with the FATF's recommendations, demonstrating Seychelles' commitment to global crypto oversight standards.
- The Finance Minister of Seychelles, Naadir Hassan, introduced the Virtual Assets Bill to establish a legal framework for regulating digital asset service providers.
- The new framework in Seychelles requires VASPs to set up a company under either the Seychelles Companies Act or the International Business Companies Act.
- Nigeria has launched a regulatory sandbox for crypto, allowing licensed firms to test products under supervision, fostering innovation while ensuring oversight.
- South Africa, another African nation, has granted 138 crypto licenses as of June 2024, making it the most advanced crypto regulatory landscape on the African continent.
- In Nigeria, the Securities and Exchange Commission (SEC) has introduced a sandbox for crypto operations, aiming to advance crypto regulation in the country.
- Across Africa, nations are expected to develop their own regulatory frameworks for virtual assets as digital assets continue to gain traction, balancing innovation and risk management in the virtual asset markets.
