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The Seychelles National Assembly has enacted legislation designed to regulate virtual asset service providers (VASPs).
This law, proposed by Finance Minister Naadir Hassan, is part of the nation’s comprehensive approach to reduce risks linked to virtual assets and to ensure that VASPs function within a lawful and ethical framework.
The new regulation requires that any organization wishing to operate as a VASP in Seychelles must form a company in accordance with the Companies Act or the International Business Companies Act.
Applicants Must Demonstrate Presence in Seychelles
To be eligible for a license, applicants are required to show a presence in Seychelles, which includes appointing a resident director and maintaining an office staffed with qualified personnel.
Furthermore, all operational documentation must be available through this local office.
“For an applicant to qualify for a licence, the primary requirement is to show a significant presence in Seychelles, such as having a director who resides there,” Hassan stated.
“They must have an office in Seychelles with sufficient qualified staff and ensure that all records are accessible from that office.”
Seychelles Approves Bill on Virtual Asset Regulation
The Seychelles National Assembly has approved a draft bill to regulate virtual asset service providers (VASPs). The bill requires license-seeking VASPs to establish a substantial presence in Seychell… https://t.co/TP6JkjYSow pic.twitter.com/7EKGcj4YBN— nickletipping.wiki (@NotAnotherTip) August 20, 2024
Hassan further noted that individual applicants will not be accepted, and entities already under the regulation of the Seychelles central bank will need to secure additional approval from the bank.
Potential VASPs, including wallet service providers, virtual asset exchanges, and investment firms, will undergo a comprehensive assessment prior to being granted their licenses.
The legislation aims to strike a balance between fostering innovation in the virtual asset domain and preventing money laundering and other illegal activities.
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This approach is in line with international standards, particularly the guidelines established by the Financial Action Task Force (FATF).
The Seychelles Financial Services Authority (FSA) will oversee the enforcement of these new regulations.
The bill also incorporates measures for educating consumers and businesses regarding the potential risks associated with virtual assets, such as scams and misuse.
This initiative positions Seychelles as a forward-thinking regulator in the swiftly changing digital finance environment, reinforcing its dedication to protecting its financial system while encouraging technological progress.
EU’s MiCA Regulation
MiCA, the Markets in Crypto Assets framework, is a thorough regulatory structure created by the European Union to ensure uniformity in crypto regulation among its member states.
It received approval from the European Parliament in April 2023, and its regulations are being implemented in phases.
As part of the MiCA framework, stablecoins issued within the region face heightened regulatory obligations.
Various provisions, including those pertaining to stablecoins, are being gradually introduced, with full compliance anticipated by the end of this year.
Beginning June 30, stablecoin issuers were mandated to adhere to specific MiCA requirements.
Circle, the issuer of USDC, became the first global stablecoin company to achieve compliance with MiCA on July 1.
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