Jersey Launches Public Consultation on Regulation

British Crown island Jersey is reaching out to the public for its input on the regulation of virtual currency.

British Crown island Jersey is reaching out to the public for its input on the regulation of virtual currency.

The Chief Minister’s Department published a Consultation report detailing its considerations and providing a thorough explanation of digital currency.

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Also known as Bailiwick of Jersey, the island has much in common with its potentially bitcoin-friendly British Crown counterpart, Isle of Man. It has roughly 99,500 inhabitants and is recognized as a leading offshore financial center. It is a haven when it comes to taxes such as VAT, although it does levy a flat rate of 20% for income tax.

In the past, the island has been envisioned for a Bitcoin paradise due to its perceived looser regulatory standards and financial freedom. It is home to one of the first regulated bitcoin funds, Global Advisors Bitcoin Investment (GABI) fund, which has, however, experienced difficulties maintaining banking relationships.

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Recognizing that “virtual Currency systems can be significant building blocks of a modern digital economy,” the Department wants to introduce an “appropriate and proportionate regulatory regime” in order to “encourage confidence and innovation in the sector.”

The topics of analysis mirror those from consultations held by other governments in the past, but there are a number of unique angles. For example, the question is posed:

“Do you consider that a technical quality standard for “distributed ledger” technology would be advantageous, and, if so, should it be voluntary or compulsory?”

Blockchain technology is not the first area which comes to mind when discussing regulation, as it is, after all, just a technology, distinct from the realm of money or its equivalents. Here, the consideration is quality standards that can involve the “registration, inspection, certification and periodical checking of the underlying “distributed ledger” technology system” used by businesses.

The question of whether such standards are to be made compulsory or voluntary is also to be considered.

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