The Cayman Islands has announced plans to create a new legislative framework for the cryptocurrency sector. The lawmakers want to create such regulations to attract more digital currency and blockchain companies to set up in the jurisdiction. The British Overseas Territory, located in the Caribbean, recently announced the new regime for virtual asset service providers (VASPs), with the Ministry of Financial Services publishing a preliminary set of rules with immediate effect.
The ministry described this as “Phase One” of the process.
The ministry described this as “Phase One” of the process, introducing anti-money laundering and counter-terrorism financing measures. As part of the new rules, operators already in the Cayman Islands, along with those setting up in the jurisdiction, will be required to notify and register with the Cayman Islands Monetary Authority, which oversees the implementation of CFT/AML rules. Phase two of the implementation process is set to begin in June next year, which will detail the requirements for licensing and “prudential supervision” for firms registered as VASPs.
The new virtual asset bill outlined measures.
The measures are outlined in the new virtual assets bill, which is set to be presented to lawmakers of the Cayman Islands Legislative Assembly at the next sitting. According to lawmakers, the new measures will help attract blockchain and digital currency businesses to choose the Cayman Islands as their primary jurisdiction. The roll-out of Phase One coincides with the Cayman Islands being assessed by international agencies, including the Financial Action Task Force (FATF) and its regional counterpart, the Caribbean Financial Action Task Force, to ensure adequate protection against proliferation financing—the financing of weapons of mass destruction.
