Nauru seeks to become a hub for blockchain industry with the launch of digital asset regulator

Nauru Parliament building/Photo courtesy of the government of Nauru

By Pacific Island Times News Staff

The Nauru Parliament has passed a measure establishing an autonomous agency to regulate cryptocurrencies and the blockchain industry, with its sights set on positioning the tiny island nation as a leading digital economy in the region.

The Command Ridge Virtual Asset Authority—named after the highest point of land in the country—will govern virtual assets, digital banking and blockchain technologies.

The Nauru government described the launch of the regulatory office as “a landmark move," marking the first digital asset regulator in the Pacific island region.

“This bold step aims to harness the potential of virtual assets to diversify revenue streams and fortify economic resilience,” Nauru President David Adeang said Tuesday following the Parliament's action on the legislation.

In Nauru, laws are enacted after being certified by the speaker of the parliament and do not require the president’s signature.

According to a press release from the Nauru government, the new office will develop a licensing scheme that allows virtual asset service providers to register and offer their services using Nauru as a base.

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Adeang said the regulation would pave the way for Nauru to be a digital asset leader in the region and is another step toward strengthening financial integrity, investing in future generations, and forging new pathways for resilience.

He noted that the United Nations Multidimensional Vulnerability Index acknowledged Nauru as one of the Pacific’s most at-risk nations due to its heightened exposure to economic and environmental shocks, thus the need for the government to embrace innovation.

“Nauru aims to foster sustainable growth, channel new financial inflows into strategic instruments such as its Intergenerational Trust Fund, and reduce its reliance on climate financing, which is often challenging to secure,” Adeang said, adding that his country seeks to secure a more sustainable and self-reliant economic future.

“We want to be a government of solutions and innovation, be proactive, not passive, and positively approach the future with boldness,” he said.

Maverick Eoe, Nauru's minister of commerce and foreign investment, noted that more countries are recognizing the potential of virtual assets from blockchain technologies to decentralized finance.

“This bill proposes to introduce a framework that will put Nauru on par with other countries leading in the development of their digital economies and generating revenue from such developments,” he said.

 “The licensing framework ensures Nauru becomes a competitor, attracting businesses that bring investment, job creation and financial innovation,” Eoe said.

The commerce chief said regulating virtual asset service providers, token issuance and digital transactions can position Nauru as a hub for these types of innovation and development in the Pacific island region.

The Nauru government said the regulatory agency will be tasked with ensuring cybersecurity standards, monitoring financial transactions, and enforcing compliance with international anti-money laundering and financial transparency protocols.

The bill, which provides legal certainty for token issuers, introduces a groundbreaking token classification system that provides clarity for the global crypto industry. 

The newly passed measure states that cryptocurrencies are presumed commodities, not securities. It provides that utility and payment tokens are excluded from investment contract status, and that governance and reward tokens are protected from misclassification.

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