This article was written by Natalie Johnson
Although you may never have heard of it, a small country of just 100,000 people sits between England and France called Jersey. The island is just 45 square miles and attracts many startups and successful companies to its shores. Leading the way for Fintech in Europe, Jersey has begun to take on its own challenge of Bitcoin regulation.
The Government of Jersey just released a Consultation Paper on July 9 to open up discussion on the risks of digital currency and ways to approach regulation.
Jersey – A World Leader In Finance
Over the last 50 years, the country of Jersey has been a global leader in finance. Companies and entrepreneurs flock to Jersey for many reasons
, including its 0% corporate tax rate. Jersey is one of the few countries that are debt-free and have stable reserves. The country generates over $6 billion USD in gross national income – quite impressive for its small population. With its new regulatory framework, Jersey plans to further develop its digital ecosystem and encourage new Bitcoin and Fintech startups on the island.
To construct its new regulatory framework, the Government of Jersey has collaborated with various agencies, one of them being Digital Jersey
. Digital Jersey is an organization created to establish Jersey as a world-renown ‘digital centre’. The organization not only works alongside the government to form policy, it supports the digital industry and even helps startups receive funding.
Digital currencies are right at the intersection of the financial and digital sectors and is an area of significant development and investment within the overall Fintech space. As a leading global finance centre, it is important for Jersey to take a thorough and considered look at both the opportunities and the challenges that digital currencies offer. This consultation will help inform a collaborative approach between government, the finance and digital sectors and regulators that will establish the right way forward for Jersey in this area.
Andy Jarrett, Director of Digital Jersey
Andy Jarrett, proactive member and Director of Digital Jersey, published a blog
titled ‘Jersey’s Consultation on Cryptocurrencies & the Future of Fintech’, following the release of Jersey’s Consultation Paper. Andy writes: “The consultation paper takes into account a wide range of views from leading organisations and sets out how various jurisdictions from across the globe are regulating this industry, highlighting the risks that the Government believes are associated with virtual currencies in their current form, including money laundering and terrorist financing risks.”
How Digital Currency Regulation Will Benefit Jersey
Bitcoin and Fintech offer great potential for Jersey and its economic growth. Andy states, “Fintech gives businesses the opportunity to create new markets or disrupt existing ones; Jersey has a strong financial services sector and a depth of experience, which when combined with new thinking and technology, means the potential for Jersey to create and grow the sector, very exciting. Blockchain and distributed ledger technologies have the opportunity to provide an infrastructure layer, for example locking in non-repudiation into transactions. Fintech will augment existing businesses and create new opportunities for emerging ones.”
One of the major challenges of digital currency is consumer protection. Andy points out that although digital currency is alot like cash, it is much more versatile. For this reason, consumer protection is important for local purchases, he says.
“For commercial activity, given this is linked to financial services, there must be appropriate regulation to encourage only the right businesses, so we can encourage growth whilst also protecting citizens and the reputation of the island.”
Jersey’s Consultation Seminar
Jersey has scheduled a consultation seminar to act as an open forum to discuss key issues, ask questions, and provide feedback. The seminar will be held August 3, 2015 at The Town Hall in St Helier, Jersey from 12pm – 2pm. The event is free to attend by using this link to register
. Responses may also be submitted online
. Industry experts and those involved in the Bitcoin and Fintech sector are invited to make suggestions and voice their concerns on the Consultation Paper until August 7, 2015.