Virgin Islands (U.S.)

The regulatory status of cryptocurrency in the U.S. Virgin Islands (USVI) is classified as **Allowed-UnRegulated** due to a specific determination by the local financial regulator to exclude digital assets from its oversight. Unlike states such as New York (which requires a BitLicense) or most U.S. states (which regulate crypto under Money Transmitter Laws), the USVI Division of Banking, Insurance and Financial Regulation (DBIFR) issued **Bulletin 2022-01**, explicitly stating that the Territory's *Uniform Money Services Act* (UMSA) does not cover cryptocurrency. Consequently, the Banking Board declared that cryptocurrency is a 'non-licensed product' and that it 'will not approve or consider' money transmission applications for entities performing only cryptocurrency services.

This 'hands-off' approach by the prudential regulator creates a unique environment where crypto businesses do not require a local license to operate. However, this does not imply a lack of all oversight. As a U.S. territory, the USVI falls under the jurisdiction of federal agencies. Cryptocurrency exchanges and custodians operating in the USVI must register as Money Services Businesses (MSBs) with the U.S. Financial Crimes Enforcement Network (FinCEN) and comply with the Bank Secrecy Act (BSA), including AML and KYC obligations. The local exemption merely removes the additional layer of territorial licensing and bonding.

Contrasting with the DBIFR's passive stance, the **University of the Virgin Islands Research and Technology Park (RTPark)** actively incentivizes the sector. The RTPark, an economic development authority, markets the USVI as a hub for blockchain and fintech innovation. It offers qualifying businesses substantial tax benefits, including a 90% reduction in income tax liability and exemptions from gross receipts and excise taxes. This creates a bifurcation where the economic arm of the government promotes crypto while the financial regulator declines to supervise it.

Retail traders in the USVI face no legal restrictions on buying, selling, or holding digital assets. Major global exchanges and platforms serve the territory, often treating it similarly to a U.S. state for federal compliance purposes. However, the DBIFR's position means that local consumer protections inherent in the money transmission licensing regime (such as surety bonds and permissible investment requirements) do not apply to crypto assets held by local entities. Residents must rely on federal protections and the terms of service of the platforms they use.