Key points:

The FSC has opened consultations on proposed rules to license and supervise virtual asset service providers (VASPs) in Jamaica.

Jamaica has no domestic VASP sector but crypto flows linked to the country were estimated at US$2.07 billion in 2024.

The proposed framework would introduce six licence classes, AML/CFT/CPF rules, business conduct standards, and local substance requirements.

THE Financial Services Commission (FSC) has opened consultations on proposed rules to license and supervise virtual asset service providers as Jamaica prepares to regulate a sector linked to an estimated US$2.07 billion in crypto transactions last year.

VASPs are businesses that provide services such as exchanging, transferring, safeguarding or administering virtual assets, including cryptocurrencies such as bitcoin, Ethereum and stablecoins.

Jamaica has no domestic VASP sector but the Government has moved to create a legal framework for future providers. The FSC has begun the consultation process to better understand feedback from prospective players on the proposed regulations. The consultation opened on June 11 and is scheduled to close on July 10.

“Unlike the securities and insurance sectors where regulatory norms have been refined over decades of supervisory practice, the virtual asset sector has no prior regulatory baseline in Jamaica. The commission therefore has no historical compliance data and no established supervisory relationship with the entities that will be affected,” the FSC said in the consultation paper.

The FSC has put forward anti-money laundering, counter-financing of terrorism, and counter-proliferation financing (AML/CFT/CPF) guidelines, business conduct standards, and licensing requirements for VASPs during the consultation process. These measures would form the backbone of the sector’s regulatory framework once the legislation is implemented.

Under the proposed framework, VASPs would be placed into six licence classes based on the type of activity they conduct. Class A would cover trading platform operators or exchanges while Class F would cover conversion services between virtual assets and fiat currency, or between different virtual assets.

Although the sector would be newly regulated in Jamaica, proposed applicants would still face familiar regulatory tests including fit-and-proper requirements for owners, directors and officers.

The FSC expects the regulatory regime to be completed in the fiscal year ending March 2027 and has budgeted to collect $21.25 million from VASPs. It would be another expansion of the FSC’s oversight framework, following the regulation of trust and corporate service providers in April 2022. Both sectors gained more prominence after risks flagged by the Financial Action Task Force (FATF), the global standard-setter for anti-money laundering and counter-terrorist financing.

Virtual assets have gained wider use over the past decade, including for payments, investment, remittances and, in some cases, sanctions evasion and other illicit activity. The decentralised nature of cryptocurrencies and other virtual assets has created risks that FATF has sought to reduce.

FATF extended its anti-money laundering and counter-terrorist financing standards to virtual assets and VASPs in 2019. Its 2025 targeted update pointed to increased illicit use of stablecoins in frauds and scams, and cited the theft of about US$1.46 billion from ByBit in 2025, which US authorities attributed to North Korea.

“Regulating virtual assets service providers is challenging for all. National authorities need to develop skills to understand the technology involved while service providers have to understand and apply financial rules that apply to the sector,” the FATF stated on its website.

With no domestic VASP sector, Jamaicans who use crypto services generally access them through offshore-linked channels and peer-to-peer activity. The recently published Jamaican National Risk Assessment Report said Chainalysis ranked Jamaica 104th globally on its crypto adoption index, and 15th among Latin American economies. The estimated annual transaction value of crypto flows between October 2023 and September 2024 was US$2.07 billion.

“However, these estimates are derived from a web traffic proxy methodology that apportions global on-chain flows to countries based on IP-geolocated site visits, and Chainalysis itself notes that the values should be treated as estimates only,” the report cautioned.

Due to the relatively small size of the crypto flows, FATF did not identify Jamaica as a jurisdiction with materially important VASP activity. That designation is applied to countries that exceed 0.25 per cent of global trading volume or host more than one million virtual asset users.

Virtual asset-related transactions reported through deposit-taking institutions between 2020 and June 2025 totalled $8.9 billion across 296,156 transactions, or less than one per cent of GDP. Sample analysis of peer-to-peer platforms also indicated that Jamaica had annualised transaction volumes of US$0.98 billion, though the report said the flows remained relatively small in global terms.

“In this sense, the VASP legislative framework constitutes a direct output of the national risk assessment process, ensuring that regulation, supervision, and enforcement evolve in line with Jamaica’s demonstrated risk exposure and international standards. The assessment will be updated periodically as the legislative framework becomes operational and as a more complete view of the domestic and cross-border VA market becomes attainable,” the report noted.