Jurisdictional Perspectives of Flag and Port States on the Use of Virtual Assets aboard Cruise Ships

This study examines the legal jurisdictional issues associated with the use of virtual assets on cruise ships, focusing on the interplay between the flag state principle and the port state principle. Cruise ships often operate under the laws of their flag state while on the high seas, but they also enter the territorial waters of various port states, which can impose their own regulations. The emergence of virtual assets like cryptocurrency use on board - for example, in onboard transactions or digital services - presents new regulatory challenges in determining which nation’s laws apply. Under international maritime law, the flag state generally has primary jurisdiction over vessels in international waters, yet port states retain certain jurisdictional rights when a ship is in port or in their territorial sea. This duality can lead to uncertainty and potential jurisdictional conflicts when novel activities like cryptocurrency transactions occur at sea. The analysis finds that current legal frameworks lack clear provisions for cryptocurrency use on cruise ships, resulting in gaps in oversight and enforcement. Based on these findings, the paper suggests that clarifications in law or new international guidelines may be necessary to address these gaps. Strengthening cooperation between flag states and port states is recommended to ensure effective regulation and legal certainty for cryptocurrency use at sea.