The Cayman Islands crypto regulations have been proposed to be set up along the guiding principles prescribed by the FATF. The Caribbean nation’s authorities have notified that regulations will be set up for governing the cryptocurrency industry so that it can compete with international competitors.
The fiscal authorities have begun work to draft Cayman Islands crypto regulations to bring about legislative changes in the rising sector as per the guidance given by Financial Action Task Force (FATF). Called ‘Virtual Asset Service Provider Bill,’ the legislation is aimed to bring about much-needed reforms in the realm. The proposed legislation will help crypto businesses with registration, operating procedures, and compliance concerns. FATF guidelines have been used by several nations to bring about clarity in their crypto sector.
Cayman Islands crypto regulations were long overdue
The bill aims to bring the crypto industry under the oversight of the Cayman Islands Monetary Authority. Being under the purview of the country’s financial authority, crypto businesses would have to undertake necessary compliance and secure appropriate licenses before starting operations. Virtual asset services operating in the country would have to renew their license and registrations annually to ensure they meet compliance.
The monetary authority would assess every entity and scrutinize them as per the compliance standards. Some common criteria would include skilled talent in the company, adequate capital, appropriate security protocols, and well-built accounting measures. This will weed out the nefarious elements operating out of the Caribbean country.
Sandbox for virtual asset service providers
Reportedly, there would be a regulatory sandbox for the virtual asset services providers. To register under this category, the company must give sufficient evidence that their services help improve the country’s financial systems. The aim is to improve the nation’s monetary mechanisms and bring it at par with the international standards.
Additionally, the program aims to reward qualifying companies with interesting freedoms to help them expand operations. The Cayman Islands crypto regulations proposal is extensive and includes legal compliances as well. The authorities can conduct proper oversight to take action against any defaulters.