The Isle of Man has taken a giant leap forward in developing a digital currency sector by officially moving to regulate digital currency activity.
The island's Department of Economic Development announced yesterday that it intends to take act to protect businesses and customers using digital currencies and provide an environment for high-quality businesses in the field, who wish to operate from the island.
The move has already been welcomed by Bitcoin enterprises.
"We welcome the steps taken by the Isle of Man to bring cryptocurrencies into their well established regulatory framework," said Adam Cleary, CEO of Bullion Bitcoin. "The forward thinking approach pursued by the Isle of Man authorities can be expected to enhance consumer protection and promote innovation and the growth of legitimate cryptocurrency businesses. "
Whilst a number of jurisdictions, including the UK, have taken steps to recognise the tax implications of using digital currencies, none has gone so far as to create a regulatory environment for cryptocurrency-based businesses. Doing so brings cryptocurrencies in from the cold by legitimising transactions and giving reassurance to users of Isle of Man cryptocurrency businesses that they are dealing with legitmate partners. This is an important step, as the department’s Director of E-Business Development, Peter Greenhill said.
"The Isle of Man recognises both the risks and opportunities presented by digital and virtual currencies. We are conscious of issues that have surrounded these activities but also can identify serious and credible entrants to the market wishing to explore this innovative technology. Therefore, the Government has instructed the relevant departments and statutory bodies to ensure there is a regime that promotes both business opportunities but also applies appropriate anti-money laundering requirements.
"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. We will work with Isle of Man Financial Supervision Commission, Department of Home Affairs and industry to ensure a fair and appropriate regime is implemented. This is not at this stage expected to embrace a full prudential suite of requirements, so consumers will need to be aware of this when making their decisions.
"While it will take a period of time to instigate, it is a clear demonstration of the Isle of Man’s commitment to keep abreast with market developments but also maintain its international responsibilities. We anticipate that this market will develop and change rapidly and, as a result, we will keep market changes under review and with a view to considering future regulatory regimes as required. Of course, if any business were to undertake activities that are regulated under existing regulations, we will expect them to comply fully.’