Financial Services Authority (FSA) the financial regulatory body of the Isle of Man has announced new guidelines that would determine how cryptocurrencies are termed.
FSA Says Guideline Is Aimed to Be Technology-Neutral
The report which was developed in partnership with Digital Isle of Man was announced on Thursday with the aim of providing clarity to companies wanting to set up blockchain operations in its jurisdiction.
Digital Isle of Man, an executive agency within the government’s enterprise department.
The FSA revealed that it would treat regulations on tokens independently and would consider the substance rather than the form.
In addition, such entities would also be required to comply with anti-monetary laundering laws and relevant regulations. In addition, these firms will not be required to apply for a financial services license.
Companies carrying out operations with tokens that have similar characteristics of securities and electronic money will be regulated by the FSA.
Also, tokens that offer profit, income or capital growth are termed as securities by the body and will be regulated with the issuance of a financial services license.
Furthermore, the guide also placed exemptions for tokens or cryptocurrencies that offer a store of value or access to services and are not a form of e-money. Such assets will be unregulated by the financial watchdog.
Speaking on the development, Steve Billinghurst the Regulatory lead at Digital Isle of Man believes that this is a great milestone for the country.
He further reiterated that the guidance is likely to evolve over time as the crypto situation changes in the coming years.
Regulatory Bodies Face Crypto Classification Dilemma
There has been a raft of regulations and reports in recent years from different financial regulatory bodies across the world.
Cryptocurrencies possess a different dilemma for governments globally due to its dual nature as an asset and a currency.
There has been a long-standing debate whether Bitcoin is an asset of or security.
African nation Nigeria recently made a controversial report where it classified Bitcoin and cryptocurrencies as securities as covered by BTCManager in September.
It will be interesting to see how this latest development impacts the growth of blockchain technology in the British colony.