Nauru, a small Pacific nation, has passed legislation to establish a dedicated regulatory body for virtual assets, covering cryptocurrencies, digital banking, and Web3 innovations, aiming to become a cryptocurrency hub.
Nauru is a sovereign nation located in the Micronesia islands of the western Pacific, northeast of Australia, with an area of about 21 square kilometers and a population of approximately 12,500 people. It is the third smallest country in the world and the smallest island nation.
The legislation establishes the Command Ridge Virtual Asset Management Authority (CRVAA). The Nauru government stated in a declaration on January 7, 2025, that the agency will be responsible for overseeing the licensing program for cryptocurrency companies, allowing them to register and provide services based in Nauru.
Under this legislation, cryptocurrencies are defined as commodities rather than securities, and payment tokens are excluded from investment contract status.
A range of cryptocurrency activities, such as operating cryptocurrency exchanges, initial coin offerings (ICOs), non-fungible tokens (NFTs), lending, staking, yield farming, and other decentralized finance (DeFi) services, will now be subject to authorized regulation by the CRVAA.
The CRVAA will also oversee the issuance of stablecoins, cross-border payment solutions, and the operations of digital banks.
Nauru President David Adeang expressed hope that regulation would pave the way for the nation to become a leader in digital assets in the Oceania region.
Prior to the legislation, cryptocurrency trading was legal in Nauru, but there were no specific oversight, rules, or regulations governing its use.
Meanwhile, Adeang pointed out that, according to the United Nations Multidimensional Vulnerability Index, Nauru is considered one of the most economically vulnerable countries in the region.
"This bold move aims to harness the potential of virtual assets, diversify revenue sources, and enhance economic resilience," he said.
"By implementing strong oversight of virtual asset service providers (VASPs), Nauru aims to promote sustainable growth and channel new funding into strategic tools such as its intergenerational trust fund," Adeang added.
Gabriel, the brother of former FTX CEO Sam Bankman-Fried, had planned to purchase Nauru and build a doomsday shelter.
This plan was revealed in a memorandum during a lawsuit in July 2023, detailing a conspiracy by Gabriel and an unnamed FTX Foundation executive to use funds from the now-defunct cryptocurrency exchange to buy the island.
Related: Iran orders cryptocurrency exchanges to implement a curfew after a $100 million hack on Nobitex
Original article: “Pacific nation Nauru establishes cryptocurrency regulator through legislation”
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