The National Anti-Money Laundering Council of Fiji has once again reaffirmed the prohibition on Virtual Asset Service Providers (VASPs). In its statement, the body cited several reasons, highlighting serious national security and financial integrity concerns as the major reasons.
In its statement, the Council mentioned that virtual assets like cryptocurrencies pose huge risks of money laundering, terrorist financing, and proliferation financing due to the anonymous and decentralized nature of the assets. “Cryptocurrencies enable rapid, cross-border transactions that are difficult to trace, making them attractive to criminal networks and extremist groups,” the Council chairperson, Selina Kuruleca, said.
Fiji remains adamant on the prohibition of VASPs
According to Kuruleca, the stance of Fiji concerning digital assets is based more on the risks attached to them and is in line with international standards set by the Financial Action Task Force (FATF). She mentioned that while most countries have opted to regulate their crypto space, the current enforcement and supervision capabilities in Fiji do not yet support safe oversight of a sector she describes as “complex.”
“The Council’s priority remains the protection of Fiji’s financial system and the safety of its people, while promoting a secure and transparent environment that supports legitimate investment and economic growth,” Kuruleca said. The Council added that even though the regulation of virtual assets could offer benefits, regulation without the needed infrastructure will expose the country to serious vulnerabilities.
The National Anti-Money Laundering Council is responsible for coordinating efforts against money laundering and financial crimes. It assembles top-level representatives from several industries, including the Reserve Bank of Fiji, the Office of the Director of Public Prosecutions, the Fiji Police Force, Customs Services, the Financial Intelligence Unit, and Fiji Revenue. The prohibition on VASPs in Fiji will remain in place until the country strengthens its regulatory and technological capacity.
This is not the first time that Fiji has released a notice concerning crypto-related dealings, with the RBF releasing a notice to caution the public on the use and investment in digital assets. In the document, the Reserve Bank of Fiji advised the public that digital assets are not recognized as legal tender in Fiji, and therefore, they cannot be used either for payment of goods or as payment for services. The RBF also added that the only legal tender recognized is its currency and coins issued by the bank.
In addition, the bank also added that it is illegal for residents to purchase or invest in digital assets from funds held in Fiji. This includes the use of debit cards or credit cards to pay for such transactions. According to the premier bank, penalties will be served under the Exchange Control Act and will also be applied if a resident in Fiji invests in digital assets or any related instruments abroad without express approval from the RBF.
The bank also warned against the promotion of investment schemes tied to digital assets, warning persons or entities involved to steer clear. According to the bank, the investment schemes are promoted across several channels, including social media.
The bank added that it has yet to release a license, and neither has it authorized any party to offer crypto trading or investment opportunities in the country. It added that anybody found guilty of this breach will be subject to punishments under the RBF Act (1983) and the Exchange Control Act (1950).
Fiji’s strict stance against crypto closes the door on digital assets being used as a cheaper and faster alternative for businesses looking to carry out transactions across the border. This forces businesses to rely on traditional banking channels, which often come with higher fees and slower processing times.
While these are some of the negatives, the ability to monitor financials and curb money laundering and other forms of financial misconduct has been fingered by the country as a win.
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Source: https://www.cryptopolitan.com/fiji-reiterates-prohibition-on-vasps-cites-security-and-financial-integrity-concerns/
