Jersey introduces ‘light touch’ regulation of virtual currencies
Jersey’s government is to introduce a “light touch” virtual currency regulation as a way of helping to boost the industry.
Jersey’s government is to introduce a “light touch” virtual currency regulation as a way of helping to boost the industry.
Assistant Chief Minister Senator Philip Ozouf announced the new legislation at the island’s first FinTech conference.
The government have been working on the legislation for about 18 months and decided to focus just on protecting against money laundering and financial crime rather than full regulation.
Robbie Andrews, founder of bit.coin.je said there were already companies waiting to move to Jersey.
He said: “The fact that the government has taken a light touch approach where other jurisdictions have gone all encompassing with regulation will be a benefit to Jersey.
“I have been approached by several companies already looking to relocate to Jersey.”
Other jurisdictions, like the Isle of Man decided to regulate all aspects of virtual currency from the beginning.
Companies working with virtual currencies will have to notify the JFSC but will not have to pay a fee or face closer regulation until they have an annual turnover of £150,000.
Mr Ozouf said the new regulation will create a “sandpit” that will give the new industry a chance to grow.
John Harris from the Jersey financial services commission who will manage the regulation described it as a “sunrise regulation”.
He said initially companies would be regulated very likely but as the industry grew in Jersey regulation would get tighter and they would be more closely supervised.
“Obviously we have to be careful about the risk to our greater financial industry which is why we decided to focus initially on financial crime and money laundering.
“We have been working closely with the joint financial crimes unit the attorney general digital Jersey and of course Jersey Finance.”
Bitcoin expert, Dave Birch, said Jersey was right to focus on regulation, as it is the area where it can have a competitive edge.
“The barriers most of the companies we work with come from the regulatory environment. Everybody can access Bitcoins and it is hard to see how you can get a competitive advantage when you don’t have the same scale as other areas such as silicon valley.
“Where Jersey has an advantage is being able to connect the regulatory environment to those new key technologies.
“If you want to invest in these sort of technologies you want to do it in an area where you can see some sort of stability, where you can see space for the technology to develop and some understanding of the technology.
“For companies in the financial services space it is regulatory factors that are the most important.”
Officials hope the new legislation will be in place by the end of the first quarter 2016.
Other interviews from the conference
INDEX PHOTO by Jonathan Waller
