On 7 February 2022, the Virtual Asset and Initial Token Offering Services Act (the "Act") finally came into force.
This innovative Act is very promising in establishing Mauritius as an attractive location to invest in virtual assets and virtual tokens. The Act aims to provide a regulatory framework, aligned with international standards and best practices, to promote business activities for service providers dealing with virtual assets and initial token offerings, within a safe, secure and regulated environment.
The Act covers two types of assets, namely "virtual assets" and "virtual tokens".
"virtual assets" means:
- "a digital representation of value that may be digitally traded or transferred, and may be used for payment or investment purposes; but
- does not include a digital representation of fiat currencies, securities and other financial assets that fall under the purview of the Securities Act. "
"virtual tokens" means:
- "any cryptographically secured digital representation of a set of rights, including smart contracts, provided on a digital platform and issued or to be issued by an issuer of initial token offerings.", with Initial Token Offerings being defined as "an offer for sale to the public, by an issuer of initial token offerings, of a virtual token in exchange for fiat currency or another virtual asset".
The Act also provides for the technical, disclosure and the licencing requirements for Virtual Assets Service Providers and Issuers of Initial Token Offerings to operate in Mauritius.
The Financial Services Commission has additionally published FAQs on its website (available here) to assist industry stakeholders as well as the public and to further clarify the application requirements and obligations of Virtual Assets Service Providers and Issuers of Initial Tokens Offerings.
The proclamation of this Act, together with the existing framework regulating the FinTech industry (including amongst others, the Financial Services Rules on Custodian Services (Digital Asset), Peer to Peer Lending, Robotic and Artificial Intelligence Enabled Advisory Services, Crowdfunding and the National Payment Systems Act 2018), will undoubtedly further strengthen Mauritius' position as a leading FinTech hub in Africa.
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