One of the biggest fears of the digital currency industry is legislation. The concern of strict controls and heavy handed bureaucracy being imposed not just on the businesses involved in the digital currency industry itself, but of use of digital currencies themselves, has long been a contentious issue around the world. With the introduction of new legislation that refines the registration requirements of digital currency exchanges, as well as defining digital currencies as ‘money’ when applied to money laundering laws, the British Crown dependency Jersey has taken a path that offers protection for users without the restrictions of some alternatives.
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Around a year ago, the government of Jersey, a British Crown dependency, announced its intention to look at regulation for the activity of digital currency exchanges. While they said at the time they did not want to impose an oversight heavy licensing system such as that favored by New York, rather a registration system for the providers of certain types of services.
On the 23rd of September, Jersey’s legislature, the State Assembly, published a government order that clarified the legal processes they are putting in place. The new laws exempt businesses with turnover of less than £150,000 from any need for registration, and if they so go over that limit in a given fiscal year, will have 3 months to notify the government and follow the registration procedure or face sanctions.
The order in full says "Article 4 makes transitional provision for the case where turnover first exceeds £150,000, so that a person carrying on such a business will not be criminally liable if, within a period of three months beginning with the day on which the turnover reaches or exceeds that figure, the person makes an application for registration under the 2008 law".
In addition, changes to the Money Laundering regulations have been made that now include digital currencies within the definition of money that these laws apply to.
While many look on any kind of legislation as a problem for the digital currency industry, what is being introduced in Jersey is balanced, does not affect business operation to any meaningful extent and adds protection for users and crime victims as well. The idea that any digital currency will remain outside of local legislation is never going to be reality, and rather than oppose all legislation, which will not get the industry anywhere, the focus should be for encouraging this kind of benign legislation that offers some protections without adding restrictive controls on cryptocurrency businesses. Jersey has been, and remains, a country that is very open to the digital currency industry, and it is unlikely that this legislation will change that.