The move is part of a strategy to formalise oversight of the growing crypto sector. The newly formed Command Ridge Virtual Asset Authority (CRVAA) will supervise the licensing of crypto service providers operating within or from the country.
Under the new legal framework, a wide range of virtual asset-related activities, including cryptocurrency exchanges, token offerings, lending platforms, staking, non-fungible tokens, and decentralised finance services, will require authorisation from CRVAA. In addition, the regulator will have jurisdiction over stablecoin issuance, digital banking operations, and cross-border payment solutions.
Crypto classified as commodity, not security
The legislation classifies cryptocurrencies as commodities rather than securities, thereby excluding payment tokens from being considered investment contracts. This distinction sets the parameters for how such assets will be treated under Nauruan law.
Nauru, located in the western Pacific and measuring just 21 square kilometres with a population of around 12,500, had previously allowed crypto activity without a defined regulatory framework. With this move, the island nation becomes the latest jurisdiction in the Pacific region to adopt formal rules governing virtual assets.
Government representatives said the establishment of CRVAA reflects a national interest in diversifying income sources and improving economic resilience. Officials pointed to Nauru’s status as one of the most vulnerable countries in the region, according to the United Nations Multidimensional Vulnerability Index, as a motivating factor behind the regulation.
Authorities also indicated that increased oversight of virtual asset service providers (VASPs) could help channel financial inflows into public reserves such as the Intergenerational Trust Fund, which supports long-term national development.
In past years, Nauru gained attention in the crypto space due to unrelated plans by Gabriel Bankman-Fried, brother of former FTX CEO Sam Bankman-Fried. Legal documents from mid-2023 revealed discussions between Gabriel and a former FTX Foundation official about purchasing Nauru with funds from the now-defunct exchange.
