Jersey’s first major Fintech conference, 'Fintech Jersey' has, this morning, heard the States of Jersey's proposal to regulate virtual currency in Jersey.
The island is already home to the first regulated Bitcoin Fund and the new regulatory proposal is intended to encourage confidence and innovation in the sector.
The Assistant Chief Minister with special responsibility for financial services and the digital sector, Senator Philip Ozouf, addressed the conference at 9am. In his statement he noted how: "The Government of Jersey has placed a large amount of focus on fintech because the technologies that are being developed have a huge economic potential for Jersey, as a leading international finance centre, and for the world at large.
"Ultimately, the technologies being developed today will revolutionise the way we bank, the way we invest, the way companies raise money. It will lead to new products, new services, new lenders and many new opportunities...
"What governments can do... is create the best environment in which this financial innovation can flourish. The release of this policy today, is a stepping stone along that path for Jersey.
"When the Government consulted on Regulation of Virtual Currency in July 2015, we stated that the creation of a business-friendly framework that encourages innovation, jobs and growth in both the financial services and digital sectors was a priority. Virtual currency systems can be significant building blocks of a modern digital economy and the introduction of an appropriate and proportionate regulatory regime in this area is intended to encourage confidence and innovation in the sector.
"Following the consultation exercise and further policy consideration, the Government has arrived at a policy position in respect of the regulation of virtual currency. Ultimately, the aim of this policy is to further enhance Jersey’s proposition as a world leading fintech jurisdiction.
"The purpose of the policy document is to outline Jersey’s commitment to creating an environment that encourages confidence and innovation in the digital sector whilst protecting the island from the most prominent money laundering and terrorist financing risks that are presented by virtual currencies in their current form.
"It is important to consider that with any rapidly evolving arena, policy cannot be viewed as static. Therefore, Government agrees with responses in the consultation that encouraged ongoing evolution of proportionate regulatory policy. This ongoing policy evolution can be achieved through Government, the industry and proposed regulator – the Jersey Financial Services Commission (JFSC) - working together. It is for this reason that this policy includes a recommendation that Digital Jersey establish an industry expert working group to both monitor the effect of this virtual currency policy, as technology and the global landscape evolves. The working group should also ensure that industry can communicate with both the JFSC and the Government on the effect of the policy.
"The policy document on regulation should not be viewed as final; it should be viewed as acting as a starting point. Based on the responses to the consultation we think this is a good starting point where Jersey can be the chosen location to both allow existing virtual currency business to innovate and grow whilst attracting new business to our shores.
"Equally, during the consultation exercise we asked about new technology such as distributed ledgers and the blockchain and the potential of those technologies for Jersey. Whilst the consultation has not yielded any definitive action that should be taken at this point, this is going to be an area we continue to monitor closely with the JFSC and the industry.
Senator Ozouf's statement and the full policy document can be viewed at the link below.
At 4.30pm, Vladimir Jizdny from the Jersey Financial Services Commission is due to give a presentation on crypto-currency regulation along with George Pearmain from the Chief Minister’s Department, who will outline the proposed policy position in more detail.
Both of these talks will be live streamed via the @digitaljersey Twitter account.