Isle of Man, the British dependency, could offer an isolated paradise for cryptocurrencies. The Financial Supervision Commission (FSC) ruled that many of the island’s licensing laws do not apply to Bitcoin, CoinDesk reports. This hands-off approach might signal the birth of a friendly relationship between the island government and novel Bitcoin-inspired payment systems.
According to Robert Paul Davis, the General Counsel for Canadian-based payment processing service Counting House Group, the FSC acknowledged that a digital currency exchange “that holds client funds with a licensed overseas payment service provider” does not have to file for a license on the island.
The small, self-governing dependency has nurtured thriving niche sectors, including e-business, e-gaming, finance, and space, assisted by the island’s comparatively low taxes. Because of the island’s low income tax rates—the non-resident rate is 20%–it has garnered the reputation of a secretive tax haven.
Although the FSC ruling is a cordial step and the fiscal history is a positive indication of a deregulatory climate, the report points out that current regulations are not set in stone. This is particularly true for the novel cryptocurrency space. According to the FSC ruling as reported in CoinDesk:
It is therefore important that if the client pursues its interest in operating from the Isle of Man that it keeps abreast of relevant legislative changes and remains prepared for these possible eventualities.
Even so, 15 exchanges are already contemplating opening business on the island, according to Eric Venz, a board member of the UK Digital Currency Association.
Since most governments have approached the novel payment systems with a mixture of caution, regulations, hostility, businesses that want to build off of the novel protocol have had a difficult time developing. The island’s uniquely liberal policies could potentially offer a ripe experimental ground for digital currencies and entrepreneurs actively hunting for friendly jurisdictions from which they can launch businesses.