The world's smallest island nation, Nauru, establishes the first cryptocurrency regulatory authority in the Pacific.

## The Pacific’s First Cryptocurrency Regulator

On June 17, the Parliament of the Republic of Nauru passed a bill to establish the first cryptocurrency regulatory authority in the Pacific region. The law will create the “Command Ridge Virtual Assets Authority (CRVAA)” and allow cryptocurrency operators to develop their businesses based in Nauru through a registration system.

Nauru is a small island nation of about 10,000 people located in the Pacific Ocean with an economic structure that has depended on phosphate rock extraction. The United Nations Multidimensional Vulnerability Index recognizes the country as one of the most vulnerable to economic and environmental shocks in the Pacific, and the government has an urgent need to diversify its economy.

President David Adean explained that the introduction of this regulation aims to diversify revenue sources utilizing cryptocurrency and strengthen economic resilience. The goal is to redirect new capital inflows towards strategic investments such as intergenerational trust funds, thereby reducing dependence on scarce climate change mitigation funding.

CRVAA is responsible for the supervision of virtual currency operators, anti-money laundering measures, and monitoring compliance with international financial transparency protocols. The bill presumes virtual currencies to be commodities rather than securities and introduces a groundbreaking classification system that excludes utility tokens and payment tokens from investment contracts.

Regulated entities include virtual currency exchange operations, wallet services, ICO and NFT issuance, DeFi services, and stablecoin issuance. Maverick EOE Minister of Commerce and Foreign Investment stated that this framework would allow Nauru to gain competitiveness equivalent to that of advanced countries in digital economic development.