Guernsey aims to open up opportunities for digital finance

Listen to this article

0:00

/197.568

1×

• The Guernsey Financial Services Commission has released a Digital Finance Consultation Paper.
• The consultation focuses on regulatory measures for digital finance in the Bailiwick.
• Key proposals include amendments to the Virtual Asset Service Provider regime.
• The consultation period will last until 6 March.

The Guernsey Financial Services Commission has launched its Digital Finance Consultation Paper, aimed at fostering the adoption of digital finance within the island.

This initiative seeks to clarify regulatory frameworks surrounding emerging technologies and proposes strategic amendments to the Virtual Asset Service Provider regime in Guernsey.

The proposals included in the consultation have emerged from extensive dialogue with stakeholders through the Commission's Digital Forum.

Engagement activities included roundtable discussions on topics such as digital asset custody, tokenisation, stable coins, and artificial intelligence, alongside an analysis of international regulatory trends.

These efforts are designed to enhance Guernsey's attractiveness as a forward-thinking, reliable hub for digital finance.

Key proposals from the consultation include:

• Permitting the tokenisation of collective investment schemes on public blockchains, provided suitable controls are in place.
• Clarifying the regulatory treatment of tokenised securities under the Protection of Investors Law.
• Modifying the VASP regime by lifting the general prohibition on retail activity and simplifying licensing processes.
• Establishing a new framework for stablecoin issuers.
• Assisting the development of digital asset custody services.
• Offering guidance on the integration of blockchain technology within insurance contracts.
• Strengthening compliance with anti-financial crime measures through technological enhancements.

William Mason, Director General of the GFSC, outlined the initiative's goals, stating, “This consultation is about ensuring Guernsey positions itself at the forefront of good quality financial innovation whilst maintaining regulatory integrity.

"By providing clarity on emerging technologies and opening up opportunities for digital finance, we aim to support the Bailiwick’s financial services sectors in adapting to global trends and attracting new business.”

Gillian Browning, Deputy Director General (Policy and Supervision), emphasised the importance of stakeholder engagement, noting, “Stakeholder engagement, building on the Bailiwick’s existing strengths, has been pivotal to the Commission’s digital finance policy development thus far.

"All feedback during the consultation period will be valuable; enabling us to assess risks, opportunities, and potential business demand; towards the goal of supporting future sustainable growth.”

The consultation process is set to continue until 6 March. For further details and access to the consultation paper, visit the GFSC's official page.