Virtual Assets in Jordan, A New Regulatory Era: An Analysis of the Legal Framework Governing Virtual Asset Services

Introduction

The regulation of virtual assets has been a defining feature of financial law reform across the globe for nearly a decade. Jurisdictions ranging from the European Union to Singapore, the United Arab Emirates to the United States have each, in their own way and at their own pace, constructed regulatory frameworks to govern the rapidly evolving world of digital finance. Jordan has now joined that conversation and while it arrives later than many, it does not arrive unprepared.

The enactment of the Law Regulating Dealings in Virtual Assets No. 14 of 2025 (the "Virtual Assets Law"), followed by the Virtual Asset Service Providers (VASP) Licensing Regulation No. 94 of 2025 (the "Licensing Regulation"), and most recently the Executive Instructions for Virtual Asset Activities of 2026 (the "Executive Instructions"), marks Jordan's first comprehensive and cohesive legal framework for virtual assets. Together, these three instruments form a layered regulatory architecture that governs who may operate in this space, on what terms, and under what ongoing obligations.

This article analyses that framework. It does not seek to offer a comparative analysis of how Jordan's approach measures against other jurisdictions, nor does it advocate for any particular policy position. Its purpose is analytical and informative: to set out clearly what the law says, what it requires, where it is clear, and where it leaves questions open. It also addresses, in practical terms, what the framework means for entities seeking to enter the Jordanian virtual asset market.

Jordan's entry into this space, though measured in time, reflects a considered approach. A framework built with deliberation rather than urgency carries its own advantages and as this article will show, the Jordanian legislature and regulator have been thorough in their ambitions, if not always complete in their execution.

The Legislative Architecture: Law No. 14 of 2025

The Virtual Assets Law provides the foundational layer of Jordan's regulatory framework. Enacted on 16 June 2025 and entering into force on 14 September 2025, it establishes the core definitions, the scope of regulated activity, the institutional architecture, and the principal obligations that flow from it.

The law defines virtual assets as: "a digital representation of value that can be traded or transferred digitally and may be used for payment or investment purposes." The definition seems to be intentionally broad, designed to capture the full spectrum of instruments in circulation. 

Article 4 sets out eight categories of regulated activity: platform operation and management; exchange of virtual assets for Jordanian or foreign currency; exchange between virtual asset forms; transfer between addresses or accounts; custody and management; brokerage services; participation in and provision of financial services related to virtual asset offerings; and any further activity designated by the Council of Ministers on the recommendation of the Jordan Securities Commission ("JSC"). The JSC holds primary regulatory authority, licensing, supervision, inspection, and enforcement.

However, the CBJ retains a distinct and parallel role as the Virtual Assets Law carves out a specific regime for institutions already regulated by the CBJ. Banks and CBJ-supervised financial entities are deemed licensed to conduct virtual asset exchange and custody activities, provided they obtain prior CBJ approval and satisfy any conditions it imposes. These entities fall under CBJ supervision for their virtual asset activities rather than JSC oversight, and any violations are addressed through the penalties and procedures available under the Banking Law. This dual-track structure reflects a pragmatic recognition that established financial institutions entering the virtual asset space bring with them existing regulatory relationships and risk management frameworks that need not be duplicated.

One of the more significant features of the Virtual Assets Law is its extraterritorial scope. The law applies not only to entities incorporated in Jordan but also to any person who has a place of business in Jordan, uses Jordan as a centre for their operations, or offers products and services to clients in Jordan. In practical terms, a foreign virtual asset platform that accepts Jordanian dinar, markets to Jordanian residents, or makes its services accessible to clients in the Kingdom falls within the law's reach regardless of where it is incorporated or where its servers are located. This is not a exterior provision, it is a deliberate policy choice to ensure that the regulatory framework cannot be circumvented by offshore structuring.

The Licensing Regime: Regulation No. 94 of 2025

The Virtual Assets Law sets the foundation, but it is the Licensing Regulation that puts it into motion; establishing the process, the requirements, and the standards a prospective operator must meet before lawfully entering the market. It is here that the JSC's gatekeeping role is most clearly visible.

Licensing proceeds in two stages. The applicant must first obtain preliminary approval from the JSC before proceeding to incorporation or any structural steps. The JSC must issue its decision on a preliminary approval request within sixty days of a complete submission; failure to decide within that period is deemed a rejection. Once preliminary approval is granted, the applicant has six months to submit its full licence application, failing which the approval lapses.

The documentation demands are extensive. At the preliminary approval stage, the applicant must provide its proposed corporate name and address, company type and capital, full identification of all founders and their ownership structures, the proposed activities, and any further information the JSC requests.

The full licence application goes considerably further. The applicant must submit: the certificate of incorporation; a comprehensive AML/CTF programme covering policies on combating money laundering, terrorism financing, and proliferation financing, customer handling procedures, complaints mechanisms, and third-party arrangements; a detailed description of the company's operational policies and the technology it will deploy, including internal procedures, control mechanisms, risk management and business continuity policy, information security policy, and marketing policy; the basis for calculating fees and commissions charged to clients; a three-year business plan; audited or reviewed financial statements for the preceding three years or for the period of operation if shorter; evidence satisfying the JSC's technical and operational requirements; the names of the banks with which the company intends to operate; and full identification, personal histories, and fit and proper evidence for all proposed directors, senior management, principal shareholders, and related parties.

The JSC retains the right, before granting a licence, to commission any third party it considers appropriate, at the applicant's expense to verify the accuracy of the information and documents submitted.

Minimum paid-up capital requirements are set per activity: JOD 3,000,000 for platform operation and management; JOD 2,000,000 for custody; JOD 1,000,000 for brokerage; and JOD 500,000 for participation in virtual asset offerings and related financial services. Where multiple activities are sought, the capital requirement reflects the cumulative demands of each.

Licensing is not the end of the JSC's involvement, it is the beginning of a continuous supervisory relationship. The JSC holds broad powers to inspect licensed VASPs at any time, request documents and information, and impose conditions. Licences may be suspended or revoked across nine specified grounds, including material breach of licensing conditions, failure to commence operations within six months of licence grant, repeated regulatory violations, insolvency or liquidation, and the revocation of a related entity's licence. The JSC publishes the names of all licensed VASPs and their accredited personnel on its website, creating a public accountability register.

The Regulatory Position

This is, by any measure, a demanding framework for applicants. The documentation requirements appear to be exhaustive, and the JSC's supervisory reach extends well beyond the point of licence grant. It would be tempting to characterise this as disproportionate, but that characterisation would miss the point. The weight of the compliance framework is a direct and deliberate response to well-founded global concerns about the misuse of virtual asset infrastructure for money laundering, terrorism financing, and other forms of financial crime. Jordan is not simply opening a market it is constructing a supervised channel. Upon licensing, a VASP does not merely become a business operator. It becomes a regulated participant in Jordan's financial oversight architecture, obliged to cooperate with the JSC, to provide whatever information is required, and to function, in a meaningful sense, as an instrument of financial transparency.

Central to that oversight architecture is Jordan's AML/CTF framework. Licensed VASPs are designated reporting entities under Jordan's Anti-Money Laundering and Terrorism Financing Law, carrying obligations in respect of customer due diligence, enhanced due diligence for higher-risk relationships, transaction monitoring, and suspicious activity reporting. Cross-border virtual asset transfers are treated as cross-border transactions for AML purposes, requiring the collection and transmission of full originator and beneficiary data. These obligations are not peripheral — they sit at the core of what it means to operate as a licensed VASP in Jordan. The regulator's message is clear: access to the market comes with a meaningful and continuous responsibility to support the integrity of Jordan's financial system.

Governance and Operations

Every licensed VASP must establish a board of directors with a majority of non-executive members, clearly defined senior management functions, and four mandatory control functions, compliance, risk management, internal audit, and AML/CTF, each operationally independent from the business units they oversee. Where a VASP holds multiple licences, strict functional and accounting separation between activities is required. The board bears ultimate responsibility for the adequacy of the governance framework and may not combine the role of chairman with any executive function without JSC approval.

Client Protection and Trading Integrity

The Instructions require a written customer classification policy distinguishing retail, qualified, and institutional clients, with differentiated protection standards for each. Platform operators are prohibited from proprietary trading on their own platforms and from any conduct creating a misleading impression of trading volume or price. Market manipulation in any form is expressly prohibited. On custody, at least 95% of client virtual assets must be held in cold storage at all times, with robust key management controls and complete per-client asset records maintained and available upon request.

Reporting and Cybersecurity

Licensed VASPs are subject to continuous reporting obligations to the JSC, including monthly operational reports, annual audited financial statements, and an annual external technical audit. A dedicated information security officer must be appointed, penetration testing conducted at minimum every six months, and any material cybersecurity incident reported to the JSC by the end of the first business day following discovery. Outsourcing is permitted but does not transfer regulatory responsibility — the VASP remains fully liable for all activities carried out by third parties on its behalf.

Practical Implications

For any entity considering virtual asset activities in Jordan, the framework as it stands carries clear and immediate practical consequences.

Foreign operators cannot assume that operating from outside Jordan insulates them from the framework's reach. The law's extraterritorial scope is explicit — any platform that markets to Jordanian residents, accepts Jordanian dinar, or makes its services accessible to clients in the Kingdom is within scope and subject to JSC licensing requirements. Offshore structuring does not provide a safe harbour.

For those seeking to enter the market, early structural planning is essential. Only dedicated legal entities with a corporate purpose restricted to virtual asset activities may apply. Capital requirements are substantial, activity-specific, and cumulative where multiple licences are sought. The licensing process itself — from preliminary approval through to full licence grant — demands significant lead time, and entities should plan accordingly before making any public commitments or operational investments.

Once licensed, the compliance obligations are continuous and resource-intensive. The compliance burden is real — but as this article has sought to demonstrate, it is the product of a deliberate and considered regulatory philosophy rather than administrative excess.

Conclusion

Jordan has made a structured and substantive entry into virtual asset regulation. The framework is comprehensive, the JSC's supervisory role is continuous and well-resourced in legal terms, and the client protection provisions represent a genuine achievement. Ambiguities remain — most notably around personal dealings — and the framework's full operational impact will only become clear as the JSC builds its supervisory practice and the first generation of licensed VASPs begins operating. The overall direction, however, is unmistakable: Jordan is open for virtual asset business, on carefully considered and closely supervised terms.

Given the layered structure of the framework — primary legislation, implementing regulation, and detailed executive instructions — and the breadth of the JSC's supervisory and enforcement powers, entities considering virtual asset activities in Jordan should obtain qualified legal advice before taking any steps toward licensing or market entry. The framework rewards preparation and penalises improvisation.

Ja’far Mohammad KHAIR ALSABBAGH
AlKhair Legal Attorneys, Amman, Jordan