Known for being home to many financial services companies, Mauritius is now eying to attract the blockchain company with the release of security token regulations.
Mauritian Financial Services Commission (FSC) has issued a full framework on Monday for security tokens and is also starting to license companies, thus creating a regulated environment for the much-sought tokenization.
“As part of our core strategy, the FSC is aiming at positioning Mauritius as a regional hub of sound repute in the field of Fintech,” Dhanesswurnath Thakoor, the chief executive of the FSC, said.
“The publication of a Guidance Note on Security Tokens Offering (STO) and Security Tokens Trading Systems is another stepping stone in building an open and transparent regulatory regime for Fintech in Mauritius.”
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Licensing will create a safe environment for the companies
With this, the off-shore African nation will allow security token trading platforms to apply for an FSC license. This will enable the companies to legally issue a token offering for security tokens, popularly known as STOs, as well as operate a trading house for such digitized securities in the jurisdictions.
However, the regulator is also cautious with the new technology-driven industry and risks associated with it.
The guidelines highlighted that the license holders need to follow a strict money laundering (AML) and countering the finance of terrorism (CFT) requirements. And, similar to the traditional exchanges operating in the jurisdictions, these platforms also have to publish daily trading data and seek review from the regulator.
Moreover, any licensed security token trading system needs to maintain a minimum of 35 million Mauritian rupees (around $880,000) as fiat reserve. They also need to partner with digital assets and traditional custodians for the safekeeping of their assets.
Similar to Mauritius, many other tax heavens including Gibraltar and Malta tried to lure blockchain companies in the past. The African country is now aiming specifically for the companies blooming in the regions of Africa and India.