NEWS & INSIGHTS

The Jordanian Parliament has approved the Virtual Assets Regulation Law,[1] which recently entered into force ninety days after its publication in the Official Gazette on the 16th of June 2025 . Under its provisions, virtual assets activities in Jordan have become lawful, regulated, and protected by law. This marks a significant shift from the previous policy of both the Central Bank and the Securities Commission, which had prohibited dealings in such assets.[2] The law represents a notable development of Jordan’s approach to global evolutions, particularly in light of the rapid acceleration of the digital economy worldwide. The new legislation further provides many traders in Jordan, especially among the youth, with the opportunity to invest in these assets, which are expected to constitute a fundamental pillar of the future economy.

This law has come in response to an urgent need to regulate this sector in order to protect traders. The Jordanian legislator has established the conceptual framework for the key terms related to this sector by relying on the definitions adopted by the Financial Action Task Force (FATF),[3] as it defined virtual assets as:

“A digital representation of value that can be traded or transferred digitally and may be used for payment or investment purposes, provided that such representation does not fall under the regulations governing fiat currency, securities, or other financial assets regulated by other legislation.”[4]

Based on this definition, virtual assets are digital values that can be transferred (through specialized platforms) or used for payment or investment purposes. They do not constitute money issued or guaranteed by the central bank, nor can they be classified as securities such as shares or bonds. Prominent examples include cryptocurrencies, such as Bitcoin and Ethereum, and non-fungible tokens (NFTs), which represent ownership of digital artwork, in-game items, or virtual art that can be bought and sold, as well as other forms of virtual assets.[5]

The law differentiates between virtual assets on the one hand and e-money and Central Bank Digital Currency (CBDC)  on the other, explicitly excluding the latter from the scope of its provisions. E-money is defined as a financial value stored on electronic instruments, such as prepaid cards or smartphones, and constitutes legal tender that may be used for the payment of goods and services obtained by consumers.[6]

Central Bank Digital Currencies (CBDCs) are defined as digital representations of the national currency, issued by the central bank to facilitate payment operations. They differ from virtual assets created by the private sector.[7]

In addition to providing a definition, the law has regulated the provisions governing dealings in virtual assets in a manner consistent with the international standards of the Financial Action Task Force (FATF). These standards require the government to implement prerogatives that include licensing and regulating virtual asset service providers, supervising both the providers and virtual asset activities, and enacting laws and procedures to combat the use of virtual assets in money laundering and terrorist financing activities. The standards further require virtual asset service providers to apply the same measures imposed on other financial institutions in assessing risks related to virtual assets and providing them to investors, as well as to obtain, retain, and securely transmit information on the sender and the recipient when carrying out transfers.[8]

Forms of protection:

The forms of protection for investors stipulated by the law in regard to financial assets are comprised of the following:

1. Licensing Requirement of Virtual Assets Service:[9]

 
The licensing requirement plays a crucial role in providing investors with legal protection, particularly in the event of disputes, and it strengthens the role of the Securities Commission in supervising the sector to safeguard traders’ rights[10] .The law distinguishes between traders who engage in virtual asset activities for their own account and entities that conduct such activities on behalf of others (virtual asset service providers), with investment funds investing in virtual assets being a prominent example. The law requires that a virtual asset service provider be a legal entity, whether Jordanian or non-Jordanian (such as companies), and obtain a license from the Securities Commission to provide these services on behalf of others. At the same time, natural persons are prohibited from providing such services, promoting them within Jordan, or using Jordan as a base for their operations.[11]

These requirements apply to any service provider that is established in Jordan, whether it has its headquarters or a base for operations in Jordan, or targeting Jordanian customers and providing its services in Jordan.[12] The law also stipulates that a regulation shall be issued to specify and govern the conditions for obtaining licenses.[13]

2. Governmental oversight of virtual assets service providers:

It is obvious that governmental oversight of virtual assets service providers plays an important role in protecting investors in this sector and in combating the use of virtual assets for unlawful activities. Therefore, the law grants the Jordanian Securities Commission the authority to supervise virtual assets service providers through the inspection of records pertaining to their activities,[14] monitoring their compliance with the requirements to combat money laundering, terrorist financing, and the proliferation of weapons of mass destruction, as well as overseeing risk assessments and issuing related instructions.[15] The Commission also has the authority to independently conduct assessments of the risks posed by virtual assets and their activities, which assists it in taking the necessary decisions and measures in this regard.[16]

The law grants the Jordanian Securities Commission the authority to officially address all public entities and governmental institutions to request essential data and information necessary for the performance of its duties, and to legally oblige the aforementioned entities to cooperate. Moreover, the law has suspended banking secrecy with respect to the bank accounts of virtual asset service providers insofar as it relates to the Commission’s inquiries. The Commission possesses the authority to inspect the accounts of service providers, granting it access to their bank accounts and the transfers of their customers. The aforementioned safeguards constitute an integral part of the legal framework aimed at combating corruption, money laundering, terrorist financing, and other financial crimes that may be committed through virtual asset activities.[17]  

3. Legal Protection of Traders’ Funds Against Service Providers

The law safeguards the funds of traders who participate in this sector through service providers. It explicitly requires a clear separation between the assets of service providers and those of their customers. Moreover, it establishes that the financial liability of the service provider is distinct from the financial liabilities of its clients. Accordingly, traders’ funds may not be seized or pledged in favor of the service provider’s creditors, nor may they be used to settle the provider’s debts. Such funds are also excluded from the service provider’s liquidation account.[18]

4.  Protection of Payers When Paying with Virtual Assets

The law prohibits service providers or individuals from using virtual assets as a means of payment for goods and services, except for those virtual assets explicitly authorized by the Central Bank for such purposes.[19] This approach is consistent with the regulatory frameworks adopted by numerous jurisdictions worldwide that oversee virtual assets[20]. This legal requirement is particularly significant as it safeguards the national currency against the risk of virtual assets becoming an alternative to fiat currency. Unrestricted use of virtual assets as payment methods could give rise to a shadow economy beyond the reach of monetary supervision, thereby undermining the ability of financial institutions to implement effective monetary policies, especially during periods of economic downturn.[21] Moreover, it safeguards payers from risks such as price volatility, money laundering, terrorist financing, and potential financial losses arising from the absence of guarantees.

It is worth noting that the law does not entirely prohibit the use of virtual assets for the payment of goods and services; rather, it permits their use in cases where certain assets are explicitly authorized by the Central Bank for this purpose. This approach provides flexibility in responding to global developments and market changes that may facilitate the emergence of stable assets.

Conclusion:

The Jordanian Virtual Assets Regulation Law represents a significant milestone in the regulation of the digital economy in Jordan. The new legislation provides a comprehensive legal framework that balances innovation, financial stability, protection of rights, and the national economy. This new legal framework also demonstrates the Kingdom’s commitment to international standards in combating money laundering and terrorist financing, and in promoting transparency. Furthermore, this new legislation  lays the foundational framework for the development of Jordan’s digital economy, while underscoring the necessity of enhancing traders’ awareness and ensuring transparency of information. These elements constitute essential pillars for safeguarding the integrity, security, and reliability of virtual asset trading.