The Regulating Dealings in Virtual Assets – No. (14) of 2025: Jordan’s Leap Toward Formalizing the Blockchain Digital Economy

Introduction

In a significant development for the digital economy, Jordan has enacted the Law Regulating Dealings in Virtual Assets No. (14) of 2025. This long-awaited legislation provides the legal framework for virtual assets' dealing, especially in commercial terms, aiming to govern their use, exchange, and related service providers within the Kingdom.

The Law defines Virtual Assets in Article (2) as:

“A digital representation of value that can be traded or transferred digitally and may be used for payment or investment purposes… excluding fiat currency, securities, or other financial assets regulated by other legislation.”

This broad definition encompasses a variety of instruments, such as:

- Cryptocurrencies (e.g., Bitcoin, Ethereum)

- Stablecoins (provided they are not issued or backed by a central bank)

- Non-Fungible Tokens (NFTs) and digital collectibles, if representing economic value

By the same token, Utility Tokens (used to access specific platforms or services), are not considered Virtual Assets since they are not used for neither payment nor investment, but are rather native to the platform they are used on and are used to access services.

Furthermore, and importantly, the law excludes Central Bank Digital Currencies (CBDCs) and digitized securities, which fall under the regulatory purview of the Central Bank of Jordan and the Jordan Securities Commission (JSC), respectively.

This article provides a detailed legal commentary on the law’s scope, licensing regime, enforcement mechanisms, and its broader practical and economic implications.

v Historical Context and Regulatory Evolution

Jordan’s cautious approach to virtual assets began nearly a decade ago, with key financial regulators issuing a series of restrictive circulars:

Central Bank of Jordan (CBJ)

- 20 February 2014: The CBJ issued its first warning, prohibiting financial institutions from using, dealing in, or facilitating transactions involving Bitcoin.

- 14 March 2018: This position was reaffirmed with increased emphasis on consumer protection and systemic risk, warning against unregulated financial products.

- 24 November 2019: A further circular reinforced that all virtual asset activities were strictly outside the regulatory framework and thus prohibited for banks and payment processors, which was ignited in light of the Dagcoin issue; it be being promoted as an acceptable currency for payment.

These directives reflected a policy of precaution and restriction in the absence of a comprehensive regulatory framework.

Jordan Securities Commission (JSC)

- In 2021, the JSC issued a formal circular prohibiting licensed financial services companies from providing services related to virtual assets, citing concerns about legality, fraud risks, and money laundering. This prohibition was meant to remain in place until a proper legal structure was adopted—which has now materialized in the 2025 Law.

The Law, therefore, represents a regulatory shift: moving from a prohibitionist stance to one of controlled permissibility. As the law requires implementing regulations, CBJ approval (for financial institutions), and detailed instructions from the JSC before its provisions can, in fact, come in force and be operationalized. Since the law is yet to come in force in September 2025, it is expected that the Council of Ministers will issue the relevant regulations, while the JSC will issue the requisite instructions for licensing guidelines and conditions.

v Understanding Dealings in Virtual Assets: Commercial vs. Personal Dealings

A key concept (that can only be read between the lines) under the law is the distinction between commercial dealings and personal use:

- Commercial dealings: Activities performed “for the account of others or on their behalf” must be conducted only by licensed legal entities (Service Providers).

- Personal dealings: The law does not explicitly prohibit natural persons from acquiring or trading virtual assets for their own account. This regulatory silence creates uncertainty: Are personal peer-to-peer transactions permissible? Would an individual sending cryptocurrency to a friend abroad fall under Art. (5)'s restriction?

This ambiguity invites caution and potentially calls for clarifying guidance or amending regulations to address personal use scenarios explicitly.

v Virtual Asset Service Providers (VASPs): Roles and Responsibilities

Who Are VASPs?

Per Art. (2), a VASP is a legal person who conducts one or more regulated activities on behalf of others. This categorically excludes natural persons from operating virtual asset services as a business.

What Activities Are Regulated? (Article 4)

The law defines eight categories of Virtual Asset Dealings, including:

1. Operating and managing platforms that enable virtual asset trades (e.g. Binance).

2. Exchanging virtual assets for fiat currencies (e.g., Bitcoin to JOD).

3. Swapping one type of virtual asset for another (e.g., Bitcoin to Ethereum).

4. Transferring virtual assets between wallets/accounts.

5. Custody and control services (wallet providers).

6. Brokerage services for buying/selling virtual assets.

7. Participation in initial offerings or sales.

8. Other activities designated by the Council of Ministers upon recommendation from the JSC.

Each of these requires licensing, and crucially, must be performed only by entities incorporated or operating through a local presence in Jordan.

v Licensing and Legal Limitations

Licensing Regime (Articles 6 & 7)

The Jordan Securities Commission (JSC) is the designated licensing authority. However, as of today:

- No implementing regulations have been issued.

- No licenses have been granted.

- No VASP may legally operate in Jordan yet.

This delay renders the law largely inoperative—yet it serves as a legislative skeleton awaiting its regulatory muscle.

AML/CTF Compliance (Articles 6 & 8)

VASPs are considered “reporting entities” under the AML Law and must:

- Identify and verify users and intermediaries.

- Collect transaction data, even for cross-border operations.

- Adopt a risk-based approach to compliance, as detailed in future instructions.

v Special Regime for Banks and Financial Institutions – Article 11

A notable exception is granted to CBJ-regulated entities, including:

- Licensed banks

- Financial companies (e.g. facilitators etc.) supervised by the CBJ

Under Article (11), these institutions are deemed licensed to:

- Exchange virtual assets with fiat currency

- Offer custodial services

but only after obtaining prior CBJ approval and meeting its conditions.

Legislative Intent and Economic Rationale

This exception is carefully limited: banks are not authorized to provide transfer services, likely as a monetary policy safeguard. The aim appears to be controlling capital movement and ensuring that virtual asset activities remain linked to the Jordanian Dinar and banking infrastructure, rather than fostering crypto-only economies.

v Criminal Liability and Penalties – Article 15

Violation of Article (5) by engaging in virtual asset activities without a license is criminalized. Penalties include:

- Imprisonment for at least one year

- Fines between 50,000 and 100,000 Jordanian Dinars

- Closure of the premises and confiscation of equipment

This represents a sharp pivot in the legal treatment of previously widespread informal activities. The once common, unregulated buying/selling of crypto among individuals or through social media channels could now carry serious criminal consequences.

Yet ambiguity remains:

Would a natural person who uses an unlicensed service be liable?
Does facilitating a friend’s crypto exchange constitute an offense? These unresolved issues demand legislative and regulatory clarification.

Conclusion: Between Legal Framework and Legal Uncertainty

The Virtual Assets Law of 2025 is both a milestone and a starting point. It provides a foundational regulatory structure, but its actual implementation depends on:

- JSC-issued licensing instructions

- CBJ policy statements

- Coordination with AML/CTF frameworks

- Judicial interpretation of personal use vs. commercial activity

A critical ambiguity remains: the status of personal dealings, which are neither explicitly permitted nor criminalized. Moreover, Article (5)(b) expands jurisdiction to cover foreign entities targeting Jordanian clients, potentially requiring global service providers to localize operations or risk non-compliance.

As we await further regulatory guidance, one thing is clear: the blockchain digital economy in Jordan will no longer operate in a legal vacuum. The Law Regulating Dealings in Virtual Assets – No. (14) of 2025 opens the door to innovation, but demands accountability, transparency, and strict legal compliance.

Through the oversight of virtual assets, Jordan aims to support fintech innovation and regional startups, extend financial inclusion for the unbanked, and increase transparency and investor trust through a clear and guided regulatory leadership. This places Jordan as a responsible and visionary participant in the global digital finance environment. The country's regulatory approach is a balanced one, embracing new financial technologies while still ensuring their operation within a sound, transparent, and secure legal structure.

Key Takeaway for Clients

Jordan’s enactment of the Virtual Assets Law No. (14) of 2025 marks a pivotal step toward shaping a secure, transparent, and innovation-friendly digital financial ecosystem. By offering a long-awaited regulatory framework, the law provides essential legal certainty for investors and operators, while positioning Jordan as an emerging hub for virtual asset activity in the region.

Nonetheless, the law imposes rigorous licensing and compliance requirements, including robust anti-money laundering standards, mandatory disclosures, and ongoing regulatory engagement. These obligations, though essential for maintaining market integrity, may present operational and financial challenges—particularly for startups, SMEs, and new market entrants.

In light of the complexity and regulatory implications of the Virtual Assets Law, it is essential for any entity—whether local or international—considering operations in this sector to consult qualified legal counsel prior to engagement. Strategic planning, legal due diligence, and informed navigation of licensing procedures are all crucial to ensuring compliance and safeguarding investment.

At Al Khair Legal Attorneys, our firm has extensive experience advising on financial regulation, fintech compliance, and digital assets frameworks. Our team is well-positioned to assist clients in understanding and meeting the legal requirements of the new regime, while aligning their business models with evolving regulatory expectations.

We invite companies, investors, and innovators to reach out to our team for tailored legal guidance as they explore opportunities under Jordan’s new digital asset landscape.