Seychelles' Cabinet of Ministers approved the new virtual assets law that will be submitted to the National Assembly, said the Vice President last week.

Ahmed Afif said in a press conference that now that the Cabinet has given its stamp of approval "this will be presented to the National Assembly as soon as it reconvenes."

The proposed regulatory framework for virtual assets (VA) and virtual assets services providers (VASP) aims to "encourage innovation and support the growth of the virtual assets industry in a responsible and sustainable manner," he added.

Work to establish the law began early this month when the National Anti-Money Laundering and Countering the Financing of Terrorism Committee (NAC) held consultations for the proposed framework.

NAC is expected to complete the regulations by the end of February

The framework will also "address and safeguard against the potential financial crime risks associated with the misuse of virtual assets products and virtual assets services providers services offered in or from the country," said the Vice President.

Among the proposed regulations is that the enterprises dealing with virtual assets should have physical offices in Seychelles, an archipelago in the western Indian Ocean.

"When the regulation is enforced, they will not be able to claim that they are operating from Seychelles if they have not been issued a licence from Seychelles," said Afif.

In addition, NAC is also ensuring that the regulation addresses such risks and the requirements of the Financial Action Task Force (FATF) Recommendation 15, which relates to new technologies.

The law, which is set to be finalised by the end of February, will be submitted for a re-rating request for recommendation by March 15.

The re-rating will be considered by the Eastern and Southern African Anti-Money Laundering and Countering the Financing of Terrorism (ESAAMLG) Task Force in September 2024.

So far, the Financial Services Authority (FSA) in Seychelles has found that there are around 80 companies or entities that might fall within the definition of VA and VASP category.

FSA anticipates that these companies will need to apply for a licence under the new law if the law is put in place.