The Pacific island nation of Vanuatu is poised to enact a long-awaited digital asset and service provider bill as early as September.

According to Vanuatu Financial Services Commission (VFSC) Commissioner Branan Karae, the bill is expected to be passed during the first week of Parliament. VFSC policy consultant Loretta Joseph revealed that the bill had been ready for several years but faced delays due to cabinet changes.

The new legislation will establish licensing and registration requirements for virtual asset service providers (VASPs), allowing them to operate legally in Vanuatu for the first time. The bill aims to help the country meet the standards set by the Financial Action Task Force (FATF), which requires nations to assess and mitigate risks associated with crypto activities.

Under the proposed act, Vanuatu will offer five different crypto licenses, covering services such as exchange between virtual and fiat currencies, as well as crypto custody. The VFSC will oversee VASP activities and ensure compliance with anti-money laundering and counter-terrorism financing laws.

Vanuatu, a small island nation with a GDP of $1.1 billion, sees the new crypto regulations as a way to "bring economic prosperity" and cement its status as an international financial center. The country is already home to over 2,300 registered institutions offering offshore banking, legal, and other financial services.