Cryptocurrencies, such as Bitcoin, are digital currencies which operate independently of central banks and traditional financial systems.
A team from Binance – which was established last July and is already the world’s largest and most respected cryptocurrency exchange – are in Jersey this week and have signed a memorandum of understanding with Digital Jersey to bring a crypto to Sterling exchange to the Island.
In a seismic move for Jersey’s finance industry, the government of Jersey, Jersey Financial Services Commission and Jersey Finance will be working together with Digital Jersey to develop this new area of fintech.
There are no official figures for Binance’s value, but the exchange has been reported as managing over $6 billion in trades in just 24 hours.
The personal fortune of its founder, Changpeng Zhao, is already estimated at more than $2 billion.
Tony Moretta, chief executive of Digital Jersey, said: ‘It’s a sign of cryptocurrencies growing up in a way because they are scaling up and want to appeal to a wider selection of consumers and businesses by demonstrating they are well regulated and they know Jersey’s reputation is strong.’
With the new exchange dealing in cryptocurrencies and Sterling, a fiat, or traditional currency, Binance is looking for its business here to be fully regulated.
Mr Zhao said: ‘We have chosen Jersey to be the next big step in our global expansion strategy for its clear and pro-crypto investment and regulatory environment.
‘With its local economy based on a major currency (GBP), and its close proximity to the UK and Western Europe, we are confident the co-operation with Jersey will not only benefit the local economy, but also form a strong operational foundation for our expansion into the rest of Europe.’
Around 40 roles will be created in the Island ranging from compliance and AML roles to digital marketing and technology, but the value to Jersey’s economy could be far greater.
It could herald Jersey developing a world-leading blockchain eco-system. Blockchain is the technology that underpins crypto currencies. It is a database that is consensually shared and synchronised across networks so that records cannot be altered or tampered with. Through Binance Labs, the business is funding investment of $100 million into other blockchain start-ups, and in addition, has an alliance of close to a billion dollars available.
Zhou Wei, chief finance officer, of Binance, who is in the Island, said: ‘With the set up of the fiat exchange here, there will be a lot of interest from the blockchain universe looking at Jersey. We definitely want to bring Binance Labs into this region and invest out of here.’
External Relations Minister Senator Ian Gorst, who has a special remit for the finance industry, said: ‘It’s no coincidence that my first official function that I’m attending as the new Minister for External Relations is a creation of a symbiotic relationship between digital and financial services. This is absolutely the space where Jersey’s future is. I want to create hope for the Island’s future by a bringing together of its technological future and strength in financial services.’