Vanuatu has passed laws to regulate digital assets and provides licensing systems for crypto companies looking to operate in Pacific island countries, a government regulatory consultant called it “very strict.” The local council passed the Virtual Asset Service Providers Act on March 26, giving the Vanuatu Financial Services Commission (VFSC) crypto licensing rights and the right to implement the Financial Action Task Force (FATF) standards for anti-money laundering, anti-terrorist financing and travel rules for crypto companies. Under these laws, the VFSC has extensive investigative and enforcement powers and provides fines up to 250 million Watts (about $2 million) and up to 30 years in prison. The law establishes a licensing and reporting framework for exchanges, NFT markets, crypto-hosting providers and ICTOs. It is worth noting that the law allows banks to obtain licenses to provide crypto transactions and custody services. VFSC said that while stablecoins, tokenized securities and central bank digital currencies “may have some similarities in practice with virtual assets,” the legislation does not affect them. The legislation also allows VFSC specialists to create a sandbox that allows approved companies to offer multiple crypto services for one year and can be renewed. The regulator said in a March 29 statement that after years of “evaluating risks associated with virtual assets” it has laid out a legislative framework that would “bring numerous opportunities” to Vanuatu and improve financial inclusion by allowing regulated services for crypto-cross-border payments.