Palau has temporarily halted cryptocurrency activities in their jurisdiction until regulatory and legal concerns are addressed.
The Palau Financial Institution Commission initiated the moratorium which would impact startups looking for opportunities to engage in cryptocurrency or virtual currency activities. The commission adopted a resolution instating the moratorium on March 19, according to a report from Palau-based Pacific Note.
According to the FIC, the resolution covers any new applicant who wishes to engage in financial activities involving virtual assets, virtual currency service provision, crypto-assets and cryptocurrencies.
According to Pacific Note, The resolution stemmed from a claim made by Palau Coin, an online cryptocurrency firm, that its venture is backed by the Palau government.
Palau Coin described itself as a “blockchain technology-based decentralized digital currency of the Palau Tourism Environmental Protection Fund led by the government of the Republic of Palau.”
The governing board of the commission said that the moratorium will remain in place until Palau has adopted a legal framework governing cryptocurrency activities.