Chief Minister’s Department of the largest of the Channel Islands published a Policy Paper on regulation of virtual currency. The draft will be presented to the parliament of Jersey early in 2016.
The aim of the policy is no less than making Jersey Island into a “world’s leading fintech jurisdiction”, according to Senator Philip Ozouf, Assistant Chief Minister of Jersey. As the Government “acknowledges the huge potential of distributed ledger technology to change the future of finance” and recognises that “virtual currency systems can be significant building blocks of a modern digital economy”, the regulation is necessary to increase confidence in the sector and to protect innovation, says the document.
The present document claims it is the result of long collaboration between Jersey’s authorities, law enforcement, financial and digital sectors, as well as of 30 advices taken “from interested parties from around the world”, and an open seminar in which over 70 people took part. It proposes a regulator – the Jersey Financial Services Commission (“JFSC”) and uses the existing framework of money laundering/terrorist financing legislation.
The document pays special attention to companies dealing with fiat money – virtual currency exchanges and bitcoin ATM operators. They will need to identify any transaction of €1,000 or more and will have to get a registration if their annual turnover exceeds £150,000. As for the companies dealing only with bitcoins, they will have to be supervised if they accept payments of €15,000 or more.
In the future adopting comprehensive regulation regime similar to New York’s BitLicense is not excluded. However, it is important to ensure that such a regime is “the right regime for industry”. That’s why the draft provides for creation of a working group that would “monitor the effect of this virtual currency policy, as technology and the global landscape evolves.” The other task of the working group would be to ensure the communication between the bitcoin industry, JFSC and the Government.
Jersey is the largest of the Channel Islands, British crown dependencies lying off the French coast. It is not a part of the United Kingdom or European Union.