According to Cointelegraph, Vanuatu has enacted laws to regulate digital assets and provided a licensing system for cryptocurrency companies wishing to operate in Pacific island countries, which a government regulatory advisor described as "very strict". On March 26th, the local parliament passed the Virtual Asset Service Providers Act, granting the Vanuatu Financial Services Commission (VFSC) the authority to license cryptocurrencies and enforce the Financial Action Task Force (FATF) anti money laundering, counter-terrorism financing, and travel rule standards on cryptocurrency companies. According to these laws, VFSC has extensive investigative and enforcement powers and has imposed fines of up to 250 million Vatu (approximately $2 million) and imprisonment for up to 30 years. This law establishes a licensing and reporting framework for exchanges, NFT markets, crypto custody service providers, and initial coin offerings. It is worth noting that this law allows banks to obtain licenses to provide encrypted trading and custody services. VFSC stated that although stablecoins, tokenized securities, and central bank digital currencies may have some similarities with virtual assets in practice, this legislation does not affect them. The legislation also allows VFSC commissioners to create a sandbox that allows approved companies to provide multiple encryption services for a period of one year and renewable. In a statement on March 29th, the regulatory agency stated that after years of "assessing risks related to virtual assets," it has developed a legislative framework that will bring "numerous opportunities" to Vanuatu and improve financial inclusion by allowing regulated services for encrypted cross-border payments.