Earlier this year the Chief Minister’s Department launched a consultation on uncontrolled digital money, such as Bitcoin, which is bought and sold online.
The consultation came after continued criticism of the currencies, which can be used in a wide range of financial transactions for goods and services, but have been used to buy illegal drugs and other black-market goods in recent years.
And following the end of the consultation – which outlined the most prominent risks associated with the currencies – the department has released a document proposing regulatory measures to ensure companies know who they are selling to in an effort to combat money laundering and counter the financing of terrorism.
It proposes that the Jersey Financial Service Commission will act as the regulator and that a working group should be launched to monitor its impact.
The policy, which was led by Assistant Chief Minister Philip Ozouf, was released yesterday as the Island held its first financial technology (fintech) conference.
The event, at the Radisson Hotel, featured speeches from experts on digital currency from around the world.
- A bitcoin is a digital currency created in 2009 by an unknown person.
- No banks are involved in bitcoin transactions meaning no transaction fees.
- Marketplaces called ‘bitcoin exchanges’ allow people to buy or sell bitcoins using different currencies.
Senator Ozouf explained that the policy would act as a ‘framework’ for regulation of the financial technology sector and that legislation would be brought forward by the early part of 2016.
He said: ‘We had an extremely positive response to the policy at the conference. We have created something that we regard as a really great and appropriately safe way to regulate a fast-changing sector.
‘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.’
He added: ‘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.’
