Robinson wants virtual assets law to go beyond containing risk

The Virtual Asset Service Providers (VASP) Act, 2026, which provides for the regulation of virtual assets in Jamaica was passed in the Lower House on Tuesday with three amendments.

A virtual asset is a digital representation of value that can be traded, transferred, or used for payment and investment.

The legislation is intended to prevent the misuse of virtual assets for criminal purposes as well as to satisfy the country’s international obligations as it relates to the prevention of money laundering, terrorism financing, and the financing and proliferation of weapons of mass destruction.

Recommendation 15 of the Financial Action Task Force (FATF) requires Jamaica to have laws in force to regulate virtual assets and virtual asset service providers.

In his contribution to the debate on the bill on Tuesday, Opposition Spokesman on Finance Julian Robinson said the proposed law was almost entirely defensive. He argued that while the bill prevents criminal misuse and satisfies FATF Recommendation 15, the legislation does not commit itself to building an industry, creating jobs, attracting investment, or developing domestic technical capability.

Robinson reasoned that if the objective of the legislation is to restrict and contain a risky sector, the current design is coherent and Jamaica should be frank about the economic consequences.

NOT FIT FOR PURPOSE

However, he said if the objective is to build a technology-based economy, the proposed statute is not fit for purpose.

“It must be amended to state a dual objective – introduce proportionality, create a staged entry pathway, add stablecoin and tokenisation provisions, and adopt technology neutrality,” he added.

He said the Bank of Jamaica should transition from central bank digital currency (CBDC) issuer to national payment infrastructure operator, building systems similar to those in Brazil to allow for a system where JAM-DEX, licensed stablecoins, and regulated virtual assets can all circulate.

“The funding model should follow the international benchmark: free for individuals, with a merchant discount rate of 0.4 per cent to 0.5 per cent introduced in a second phase, and a portion of that revenue dedicated to merchant onboarding in underserved communities,” he proposed.

Turning to the role of the Financial Services Commission (FSC), Robinson said the regulatory body is given a function to “promote innovation in, and development of, the virtual assets sector”, but this appears as one item in a list of operational duties, not as a defining purpose of the legislation.

He argued that when the FSC is required to choose between a restrictive interpretation and a facilitative one, the act provides no tie-breaker. In practice, Robinson noted that the anti-money laundering and combating the financing of terrorism mandate will dominate every discretionary decision because it is the only objective with explicit statutory weight.

ONLY A HOPE

The opposition spokesman said the growth of the sector becomes a hope, not a duty, noting that this is the same structural ambiguity that has undermined Jamaica’s cannabis framework, with international compliance obligations being satisfied but the developmental objective never given equal legal force, and the industry did not materialise at the scale promised.

In his remarks, Prime Minister Dr Andrew Holness conceded that JAM-DEX, the central bank’s digital currency, did not achieve the success originally anticipated.

Citing the urgent need to create a central payment system for the Government to make cash transfers to Jamaicans, Holness pointed to the challenges faced by the State during the pandemic and after hurricanes Beryl and Melissa.

“We must, as a matter of urgency, and I hope the central bank will take on this consideration to create a universal payment platform.”

He stressed that “we need to create the rails” on which all the payment systems in the financial sector can operate and integrate to allow for the immediate transfer of cash between persons.

“I am happy to see that the Opposition has a similar view that this universal payment system is critical for our national development,” the prime minister said.

edmond.campbell@gleanerjm.com