transparent, and peer-to-peer currency. Fantastic! Can we have that without the open, decentralised, borderless, transparent, peer-to-peer, and instead add a nice dose of heavy control?”
Personally I feel that the creation of Bitcoin mirrors the advent of the internet. Many parallels have been made to that dot com era, but the crux of the internet is its protocols such as ‘http’ which still underpins today’s latest browsers. It is those protocols that allowed us to benefit from competition in hitherto closed markets such as Skype. It was the lack of regulation of those protocols that allowed the innovation to progress at a pace.
The scale of the opportunity? Blythe Masters was recently quoted saying that applying Blockchain-based technology to the global settlements industry is worth £1.6 quadrillion.
The picture attached encapsulates for me why Jersey needs to get involved in understanding the Blockchain. Jersey is justifiably proud of a very successful financial services industry. However, having been away from the island for a number of years, I note an industry that has lacked adaptation or innovation at a pace even close to necessity if it wishes to avoid becoming another Blockbuster blaming Netflix for its demise. Just as the banks are realising they need to innovate to stay ahead of new disruptive technology, so too does Jersey PLC.
The good news is that with the help of Digital Jersey and local industry representatives, Jersey's government has listened and understood the opportunities this new technology can provide whilst being fully cognisant of the risks of being an early adopter. In a short time, there will be legislation in place to allow the JFSC to regulate cryptocurrencies. The approach is balanced and will only regulate at the interface between fiat and virtual currencies to prevent money laundering. It will also be the first time Jersey adopts a ‘sandbox’ approach to regulation where businesses below a threshold of £250,000 pa will be monitored but have lighter touch regulation applied.
The seeds of innovation have already started sprouting. Jersey is home to the world’s first regulated Bitcoin expert fund; it has a Bitcoin ATM and a growing number of businesses that will accept Bitcoin; a local consultancy business, Blockcraft Limited, which provides blockchain
consulting services, and a community forum,
bit.coin.je, where individuals can learn and meet.
A digital currency working party made up of representatives from JFSC, Digital Jersey, government and the finance industry will be formed in the coming months.
Blockchain should not be seen as a threat to our
financial services industry. By embracing an early adopter approach, we can once again put Jersey on the innovation map and create new financial services and products. By utilising our world class communications infrastructure, data centres and financial expertise, the Island could provide a myriad of solutions to new problems such as micro payments, custody of private keys, pioneering the use of the Blockchain for registries, voting, and even our eGov aspirations.
Please do get in touch if you wish to be part of the working party or would like further information in this area.
A Digital Jersey
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