British Virgin Islands Passes Crypto-Friendly Legislation
The British Virgin Islands (BVI) passed a law that could position the country as a favorable location for issuing tokens.
by Eric Nemeth, investment associate, and Juan Aranovich, editorial research
The British Virgin Islands (BVI) has introduced legislation for virtual asset service providers (VASPs), indicating it could be a favorable location for issuing tokens.
This development is a response to the perceived advantages of the “ownerless foundation” structure commonly used by DAOs registered in the Cayman Islands, which already introduced laws for VASPs in 2020.
The legislation establishes a registry for public token distribution, which allows protocols to create a subsidiary of their broader foundation's legal entity within the BVI. This structure is useful for token issuance and can provide a foundation for protocols to structure their operations.
However, while the BVI's VASP framework sets the groundwork for protocols to structure foundations in which tokens can reside, iit does not have specific laws or guidelines to govern how token sales are executed and conducted within the jurisdiction.
The British Virgin Islands (BVI) is not the only Caribbean jurisdiction looking to attract crypto-related businesses. Panama passed legislation in 2022 for the commercialization and use of crypto assets, which also offers a crypto-friendly regulatory framework for companies to register for their crypto services as long as they are compliant with AML and anti-terrorism financing activities.
On the other hand, crypto foundations might consider Switzerland due to the country’s forward-thinking regulatory framework. Switzerland's recent legislative act passed in 2021 introduced various registrations for crypto service providers, which is beneficial for protocols to maintain their foundations in the jurisdiction rather than issuing tokens from there.