The Government of Jersey has opened a consultation period to seek public opinion on whether it should regulate virtual currencies such as bitcoin.

In its consultation paper, the British Crown dependency notes the risks associated with digital currencies and the various regulation options available.

Notably, the document also highlights the possibility of adopting distributed ledger technology – which, the authority says, is the key innovation of digital currencies.

Senator Philip Ozouf, the island’s assistant chief minister, said in a statement:

“Virtual currency systems represent a new and empowering technology. This consultation will allow us to take into account a wide range of views when putting in place an appropriate and proportionate regulatory environment.

He continued: “This is about creating a modern digital economy that encourages innovation and the creation of jobs and growth whilst protecting Jersey from the unacceptable use of virtual currency.”

The consultation period will close on 7th August.

Local industry approval

Digital Jersey, a community and independent industry body involved in the preparation of the consultation, welcomed the government’s dialogue.

Noting the significance of financial services for the island, the organisation said in a statement:

“As a global finance centre, it is important for Jersey to take a thorough and considered look at both the opportunities and the challenges that virtual currencies offer.”

The consultation, it said, would aid collaborative efforts between the government, the finance and digital sectors and regulators.

Following the lead

The Jersey government’s announcement follows the lead of the UK Treasury, which announced the government’s plans to apply anti-money laundering (AML) laws to virtual currency exchanges earlier this year.

Following this, the Isle of Man established that bitcoin businesses operating from the island would have to comply with its anti-money laundering (AML) laws.

Jersey flag image via Shutterstock