The financial authorities in the Cayman Islands have proposed new crypto guidelines that are meant to align the growing crypto industry with FATF requirements, enabling service providers in the country to compete at the international level. Dubbed as Virtual Asset Service Provider Bill is one of five bills that the government proposed as it seeks to reform its financial services sector. The bill outlines the registration process for digital currency businesses in the country. Several other countries have also implemented new crypto regulations based on the FATF guidelines.
The bill brings the crypto industry under the Cayman Islands Monetary Authority.
The proposed bill brings the digital currency industry under the purview of the Cayman Islands Monetary Authority. The Virtual Asset Service Provider Bill requires any company wishing to provide virtual asset services to register with the authority and be required to renew it before 15th January every year. According to the bill, the Monetary Authority would consider factors such as whether the crypto company has enough skilled people, adequate cybersecurity measures, sufficient capital, and sturdy accounting systems. A virtual asset service provider must also have a registered office in the Cayman Islands before getting licensed to operate.
The proposed bill establishes a regulatory sandbox for VASPs.
To obtain the license under the proposed bill, a crypto company must prove that its service improves the financial services in the Islands and complies with global standards. However, companies in the sandbox shall be exempted from requirements applying to other VASPs, which would allow them to develop their services with much more freedom. The proposed bill also gives the Authority oversight powers over the crypto industry.
According to the bill, the authority can revoke the license, take to court any company that fails to comply with set guidelines, and order a VASP to substitute any senior officer. The Finance Minister of the Cayman Islands, Tara Rivers, said that these measures under the proposed bill would ensure that the islands fortify its position as a global cryptocurrency hub.
