Alderney, everyone’s favourite channel island, is attempting to set itself up as a global centre for bitcoin, much like the Isle of Man. Things, however, are not going as well as the island had initially hoped. Jane Wild, writing in this morning’s Financial Times, writes that, Alderney is finding crypto harder to turn into gold than it had expected. Alderney had planned to issue physical bitcoins, onto the market, made from gold. Bitcoin can be bought, sold and traded, in a practically anonymous transaction, through online exchanges, and although libertarians love Bitcoin, governments, with a few exceptions, have not been found to be as positive. The official position within many states is that they are concerned with Bitcoin’s use in the illicit trade in drugs as well as its use in the alleged, laundering of money. The unofficial position is that states are concerned with, what they see, as a lack of control of their citizens money and their subsequent inability to tax and govern their transactions.
[dropcap size=small]A[/dropcap]lderney had been involved, in a joint venture, with the Royal Mint, on a commemorative bitcoin that was expected to launch in the summer. Alderney has now announced that The Royal Mint has suddenly pulled out of talks. Robert McDowell, the Deputy Chairman of Alderney’s Policy and Finance committee and Chair of the Finance committee, said that he was surprised and disappointed that The Royal Mint had unexpectedly pulled out just before a final proposal was expected. He went on to say that it was his belief that UK government officials had exerted pressure on the mint. When contacted, The Royal Mint declined to comment.
This is not the first setback that Alderney has encountered. Previously, their larger neighbour, Guernsey, from which it must seek regulatory approval, had informed it that it would not grant permission to set up cryptocurrencies because of the ‘reputational dangers’ involved. The setbacks Alderney has encountered have not put other islands off, however. The Isle of Man, everyone’s favourite island between Ireland and the UK, has been looking at how it can set itself up as a global cryptocurrency centre, and reap the rewards therein.
Alderney has vowed to push on with it’s investigations into having more involvement in cryptocurrencies; Alderney is already involved in the provision of services to on-line gambling and earns approximately 40 Million Pounds per annum. Alderney is currently seeking to develop greater financial independence from Guernsey, and it clearly sees cryptocurrencies as a means to achieve this. Alderney has developed an index to track cryptocurrencies and intends to create a fund that it will base in another offshore territory such as Gibraltar or Isle of Man, although Dubai is also being investigated as a possible venue, Alderney has already received investment from Dubai.
“It would be wonderful to have such an index established in Alderney, however the index could be sited in another jurisdiction that is more welcoming of financial innovation.” Said Mr. McDowall. He continued:
“Quantitative easing, the continuing destruction of savings and increased unsustainable levels of government debt require radical measures to cure the viral weakness they have brought to the world economies. Radical measures are required to address the viral illness. Private currencies, which Bitcoin are classified as in the UK, are but one contributory solution.”
Last modified: May 7, 2014 14:01 UTC