The Seychelles Financial Services Authority issued a public statement clarifying that stablecoins, in their current form and usage in the domestic market, are not classified as “virtual assets” under the Virtual Asset Service Providers Act. As a result, stablecoins do not currently fall within the Act’s VASP licensing or regulatory requirements. The clarification is based on the Act’s definition of virtual assets, which excludes digital representations of fiat currencies, securities and other financial assets. The Authority said most stablecoins it currently observes are pegged to reference assets, are used mainly for value preservation, operate as digital representations of fiat value and are redeemable for equivalent underlying assets, rather than showing the price volatility or speculative trading features of open-market virtual assets. The statement separately notes that exchange, broking or dealing, custody and investment advice involving stablecoins may require a licence under the VASP Act depending on the scope of activities undertaken. It also highlights counterparty, reserve transparency, redemption, foreign regulatory, cybersecurity and operational risks, and encourages persons unsure of their regulatory position to seek guidance or a formal classification from the Authority.
Seychelles Financial Services Authority2026-05-20
Seychelles Financial Services Authority clarifies stablecoins fall outside the VASP Act while some related services may need licences
The Seychelles Financial Services Authority clarified that, in their current domestic form and use, stablecoins are not classified as “virtual assets” under the Virtual Asset Service Providers Act and therefore fall outside its licensing scope. The Authority noted that most observed stablecoins function as digital representations of fiat value rather than speculative virtual assets, but warned that activities such as exchange, broking, custody or investment advice involving stablecoins may still require a VASP licence and highlighted related counterparty, reserve, redemption, foreign regulatory, cybersecurity and operational risks.