Initial Token Offering Licensing in Mauritius: Stablecoin/ Digital Yuan lssuers

By Zitadelle AG

Mauritius has become a leading destination for fintechs, crypto businesses, and virtual asset projects seeking a well-regulated, business-friendly environment. Central to this is the Virtual Asset and Initial Token Offering Services Act, 2021 (the VAITOS Act) and the related licensing regimes. This article explains what is required under VAITOS / ITO licensing, the kinds of services authorised, how stablecoins feature in the regime, and some relevant currency considerations—such as the offshore yuan (CNH) - for those doing cross-border token or asset work.

What is VAITOS / ITO Licensing?

VAITOS is the legal framework established by the Mauritian Financial Services Commission (FSC) to regulate Virtual Asset Service Providers (VASPs) and Issuers of Initial Token Offerings (ITOs). It came into force on 7 February 2022.

Under the VAITOS Act:

• A virtual asset (VA) is a digital representation of value that can be traded or transferred, used for payment or investment, but does not include fiat currencies or securities already governed by the Securities Act.

• An ITO is an offer to the public of virtual tokens (in exchange for fiat or other virtual assets) by an issuer.

The FSC regulates these through licensing, rules, guidance, and supervision.

Key Requirements for ITO / VASP Licenses

If your business (or project) wants to operate under the ITO / VASP framework in Mauritius, here are the main requirements:

What Services are Authorised under an ITO / VASP Licence

Depending on the class of license granted, Mauritius permits a range of authorised activities. These are some of the key services which may be licensed under VAITOS / ITO:

• Exchanges: Between virtual assets and fiat currencies; or between different virtual assets. (“Class M”)

• Wallet / transfer services: Services that allow transfer of virtual assets, holding, administration or enabling control over virtual assets. (“Class O”, “Class R”)

• Custody services: Safekeeping/administration of virtual assets. (“Class R”)

• Advisory services: Advising on ITOs, virtual asset investments, structuring token offerings. (“Class I”)

• Marketplaces / Exchanges (centralised or decentralised): Facilitating matching of buyers and sellers of virtual assets. (“Class S”)

• Issuers of Initial Token Offerings (ITOs): Entities issuing tokens to the public per the ITO regime, including stablecoin issuance, tokenized securities, digital currencies pegged to fiat currencies (Dollar, Yuan, Yen, etc)

Stablecoins under the ITO / VAITOS Regime

One of the more complex and evolving questions is: can one issue stablecoins under this licensing regime, and under what conditions?

• The FSC publicly released Guidance Notes on Stablecoins (draft) to clarify regulatory policy in this space.

• Under those guidance notes, issuing or providing services in relation to stablecoins in or from Mauritius is unlawful without obtaining the relevant licence, approval and/or registration from the FSC under VAITOS.

• This means that projects wanting to create, issue, or operate stablecoins must satisfy all the licensing, capital, disclosure, risk management, governance, AML/CFT etc., stipulated under VAITOS and the draft Guidance.

Therefore, under VAITOS / ITO, it is possible to issue your own stablecoins - but only if you comply with all legal, regulatory, governance, transparency, and supervisory requirements imposed by the FSC.

In practice, that involves:

• Adequate reserves to back the stablecoin (or otherwise ensuring stabilisation / redeemability)

• Audits and disclosures including how reserve assets are held, valued, how redemption works, etc.

• Consumer protection and risk disclosure in the white paper or prospectus

• AML/KYC for users, clear governance, oversight etc.

Offshore Yuan (CNH) and Why It Matters

When planning token or stablecoin projects, cross-border payments, or foreign currency exposure, one should also understand currency regimes. One relevant example is the Chinese Yuan, especially its offshore version, CNH.

• CNY refers to the Chinese yuan traded in the onshore market in mainland China. It is under tighter regulatory control by the People’s Bank of China (PBOC) and Subject to capital controls.

• CNH is the offshore yuan, meaning Chinese currency traded outside mainland China (Hong Kong, Singapore, etc.), where it is more freely convertible, subject to market forces rather than strict domestic capital controls.

Why is this relevant for token / stablecoin / ITO work:

• If a stablecoin, token, or ITO is denominated in or pegged to a foreign currency such as CNH, knowing whether that currency is freely convertible matters for legal, operational and risk planning.

• Freely convertible currencies facilitate cross-border settlement, ease of movement of value, allow market pricing without regulatory hurdles.

• Using CNH or referencing it can help in structuring tokenized products, settlements, or trade offerings that have exposure to China or Chinese trading partners without being forced to deal with strict on-shore capital control constraints.

Practical Steps for Businesses: What Zitadelle AG Recommends

If you are considering setting up an ITO, issuing stablecoins, or otherwise entering Mauritius under VAITOS, here’s a high-level roadmap:

1. Pre-Assessment & Legal Structuring: Define your token or stablecoin model. Is it utility, investment, stablecoin pegged to fiat? What rights will tokenholders have? Will it be redeemable? These define whether you’re under VAITOS or need to comply also with Securities Act.

2. Hire Local Management & Build Substance: Incorporate in Mauritius. Hire senior executive(s) resident in Mauritius. Set up physical office, board and governance that operate locally.

3. Draft Full Disclosures / White Paper: Including technical design, economics of token (or stablecoin), risk factors, reserve backing, redemption, redemption risk, governance.

4. Capital, Audit, Risk Controls: Ensure sufficient capital, robust reserve management, independent audits, AML/KYC, cybersecurity, operational risk management, etc.

5. File Application with FSC: Complete application per VAITOS Act with all required documentation. Be ready for review, questions, possibly iterations. Timelines may vary.

6. Regulatory Compliance & Ongoing Reporting: Once licensed, adhere to periodic filings, maintain reserves, audits, disclosures, management of operations.

7. Currency Strategy: If your product references foreign currencies (e.g. stablecoins pegged to USD, CNH, EUR etc.), ensure you understand currency convertibility, settlement risk, cross-border regulation, and how exchanges or counterparties operate in those currencies.

Why Mauritius Is Attractive & Some Risks

Pros:

• Clear legal framework (VAITOS) for virtual assets and token offerings.

• FSC is globally recognised, and Mauritius has sought to align with international standards (AML/CFT, FATF).

• Flexibility for various classes of VASP / ITO issuers.

• Relatively competitive costs, favourable business environment, stable legal / regulatory structure.

Risks / Things to Watch:

• Stablecoin guidance is still in draft, subject to potential changes.

• Regulatory risk: FSC may impose additional requirement depending on project risk profile.

• Operational risks, including reserve management, redemption risk, cybersecurity, market risk.

• Currency risk, especially if depending on foreign currencies or cross-border components.

Conclusion

For businesses under the advisory of Zitadelle AG, Mauritius under the VAITOS / ITO licensing framework offers a feasible path to legally issue virtual tokens, conduct ITOs, and under certain conditions, issue stablecoins - provided all regulatory and operational criteria are met. At the same time, understanding foreign currency regimes like CNH versus CNY matters significantly for structuring, risk and convertibility.

If you are planning a token project, issuing stablecoins, or dealing in international currency exposure, we can help you map out the licensing requirements, compliance obligations, and optimal structure to maximise legal security, investor confidence, and operational efficiency.