Jamaica’s House of Representatives is debating legislation that would require cryptocurrency exchanges and other virtual asset businesses to obtain a licence and comply with the country’s financial crime rules.
The proposed Virtual Assets Service Providers Act would give the Financial Services Commission (FSC) authority to supervise the sector and bring Jamaica closer to international anti-money laundering standards. The framework would place digital asset businesses under oversight similar to that applied to traditional banking institutions.
Finance Minister Fayval Williams introduced the bill on Sept. 22, according to a local report. She told lawmakers that a virtual asset service provider (VASP) would include any commercial entity that exchanges cryptocurrency for fiat money, transfers digital assets between wallets, or holds crypto assets and private keys on behalf of clients.
Businesses covered by the legislation would have to verify customers’ identities, monitor transactions and report activity considered suspicious. They would also be required to follow the international “travel rule”, which involves sharing information about the sender and recipient when digital assets are transferred.
Williams said the proposed law was prompted by increasing participation in Jamaica’s digital asset market. Jamaican residents currently use overseas platforms to trade, often without the protection of domestic regulation.
“We are not legislating because virtual assets are good or bad,” Williams said. “We are legislating because they are here and our people are exposed.”
The bill would apply to any business providing virtual asset services to consumers in Jamaica, even if the company is headquartered abroad. Those operating without an FSC licence would be committing a criminal offense.
Licensed providers would come under existing Jamaican anti-money laundering legislation, including the Proceeds of Crime Act, the Terrorism Prevention Act and the United Nations Security Council Resolution Implementation Act.
However, the proposed framework would not give legal-tender status to any cryptocurrency. Williams said the Jamaican dollar would remain the country’s only official currency.
“The Jamaican dollar remains the only legal tender in this country,” she said, adding that an FSC licence would regulate a provider’s business operations but would not amount to official approval of, or a guarantee for, the digital assets it traded.
Williams described the bill as an essential first stage in regulating the industry. It would give the FSC clear powers to licence and monitor virtual asset providers, as well as close operations that failed to comply with the rules.
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