Fiji’s Stance on Virtual Asset Service Providers
In a significant move to safeguard its financial system, Fiji’s National Anti-Money Laundering Council (NAML) has reiterated its prohibition on Virtual Asset Service Providers (VASPs). This decision stems from concerns surrounding the potential misuse of cryptocurrencies for unlawful activities due to their decentralized and anonymous characteristics. The council indicated that this stance is in line with global standards set by bodies such as the Financial Action Task Force (FATF).
Concerns Over Cryptocurrencies
According to a statement released by NAML, the body has flagged serious concerns related to cryptocurrencies, particularly their role in facilitating money laundering, terrorist financing, and the funding of illegal arms proliferation. Although the council recognizes the technological advancements associated with virtual assets, they believe that the inherent features of these assets pose a significant threat, making them favored tools for criminal enterprises.
This reaffirmation comes more than a year after Fiji’s central bank threatened sanctions against individuals engaging in virtual asset purchases, including measures to restrict local debit and credit card transactions for such activities, as reported in April 2024.
Risks and Regulatory Challenges
The council’s assertion highlights how the swift and often untraceable nature of cryptocurrency transactions can easily be exploited for channeling illicit funds and avoiding detection. Moreover, NAML raised alarms over the potential use of virtual assets in financing extremist activities and acquiring weapons of mass destruction, raising issues not just for Fiji but for international security as a whole.
Despite some regions opting for regulatory frameworks around virtual assets, the council believes Fiji lacks the necessary supervisory and enforcement capabilities to oversee this sector safely and effectively. While it acknowledges the benefits that regulation can bring, NAML argues that inadequate infrastructure and enforcement could create significant risks for Fiji.
Commitment to Safety and Integrity
Selina Kuruleca, the council’s chairperson and the Permanent Secretary for Justice, emphasized that prioritizing the safety of Fiji’s citizens and the integrity of the nation’s financial ecosystem is crucial. The council envisions that its ban will foster a secure environment conducive to legitimate investment and economic development.
The current prohibition on VASPs will remain until further notice, with NAML stating that it will continue to review its approach as global standards evolve and as efforts to bolster Fiji’s regulatory systems unfold. The National Anti-Money Laundering Council plays an essential role in coordinating Fiji’s fight against financial crimes and is comprised of key stakeholders in the country’s justice and financial oversight sectors.
