Isle of Man’s government today announced its intent to take actions “aimed at helping protect businesses and customers utilising digital currencies and provide an environment for high-quality businesses in this rapidly emerging field.”
The Department of Economic Development’s Director of E-Business Development, Peter Greenhill said that they’re cognizant of both the opportunities and risks posed by digital currencies. As such, the relevant bodies have been instructed to ensure that both business opportunities are promoted and anti-money laundering (AML) requirements be applied.
The island, with a 2011 population of roughly 85,000, is a British Crown Dependency. It has the power to pass its own legislation but is technically not a sovereign nation. Its a possession of the British Crown, who manages its defense and foreign relations.
The island has become a sought financial haven, dodging the 2008-09 recession and recording 30 years of GDP growth at an average annual rate of 6%. It is ranked the 8th wealthiest international economy, ahead of both the U.S. and U.K. It has lenient tax policies, notably its 0% corporate rate. It has become a popular center for offshore banking. Sensitive to this, Greenhill stated:
“Our stance is intended to welcome those who can meet the necessary standards while also preserving the Island’s good reputation as a financial centre.”
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The announcement doesn’t make mention of specific digital currencies, such as Bitcoin, by name. Aside from touching upon money laundering, there’s no mention of the dangers/risks posed by digital currency found in statements from most other governments commenting on it. These include: price volatility, loss/theft, fraud and other criminal activity. Minister for Economic Development John Shimmin believes that when regulated, digital currency will be good for the economy:
I welcome this move to create a framework for the regulation of digital currencies. The Isle of Man is synonymous not only with innovation, but for a regulatory environment that is both effective and pragmatic.
Although Shimmin mentioned the initiation of regulation, his intention was towards the creation of a rule framework for business conduct, not actual regulation of bitcoins or other digital currencies. This is evidenced in the Q&A document detailing their stance on digital currencies in regards to taxation, regulation and AML. Answering whether the Isle of Man is regulating digital currencies, the document states:
“No, it is intending to include crypto & digital currencies under the Proceeds of Crime Act 2008 and the Designated Business (Registration and Oversight) Bill 2014 to ensure that the activities undertaken are subject to the anti-money laundering legislation. The same registration and oversight regime that will be applicable to other designated businesses will then apply to digital currency businesses.”