The National Anti-Money Laundering Council of Fiji has reaffirmed its stance against the operation of Virtual Asset Service Providers (VASPs) in the country, highlighting significant national security and financial integrity concerns associated with virtual assets like cryptocurrencies. The Council voiced concerns about the risks of money laundering, terrorist financing, and proliferation financing due to the inherent anonymity and decentralized nature of cryptocurrencies, which facilitate rapid, untraceable transactions attractive to criminal networks and extremist groups.
The Council’s position aligns with a risk-based approach recommended by the Financial Action Task Force (FATF), emphasizing that Fiji’s current regulatory capabilities are not equipped to safely oversee the burgeoning digital asset sector. While recognizing that regulated frameworks could potentially allow for the secure use of virtual assets, Fiji currently lacks the robust infrastructure needed to manage these digital financial instruments safely. The priority for Fiji remains to protect its financial system and the safety of its citizens while fostering a secure, transparent environment conducive to legitimate investment and economic growth.
The prohibition on VASPs will persist until Fiji can adequately bolster its regulatory and technological frameworks. The composition of the National Anti-Money Laundering Council includes high-level representatives from several key institutions such as the Reserve Bank of Fiji, the Office of the Director of Public Prosecutions, the Fiji Police Force, Fiji Revenue and Customs Service, and the Financial Intelligence Unit, reflecting a collaborative effort in safeguarding the financial system against illicit activities. This proactive approach underscores Fiji’s commitment to maintaining financial security and integrity, ultimately aiding in the country’s goal to encourage a growing, stable economy.
Fiji’s stance against unregulated cryptocurrencies resonates with similar decisions made by the Reserve Bank of Fiji, which has opted to focus on modernizing the National Payment System rather than pursuing a Central Bank Digital Currency (CBDC) at this time. This decision reflects a careful balance between modernization efforts and the need for regulatory oversight to protect financial reserves and maintain economic stability.
The consistent focus on enhancing the financial system, through both legal frameworks and technological advancements, indicates Fiji’s determination to support a resilient economic future while navigating the challenges posed by the rapidly evolving landscape of digital finance.
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