The Guernsey Financial Services Commission has today published its feedback paper and a guidance note on the tokenisation of assets following consultation on Supporting Growth with Digital Finance.
The papers build on work already delivered through the Commission’s Digital Finance Initiative, setting out a programme of practical measures to support innovation and strengthen Guernsey’s position as a trusted international finance centre. They also deliver one strand of the Commission’s commitment to the Finance Sector Growth Strategy 2035.
The consultation feedback confirms that Guernsey’s existing technology-neutral framework is well placed to support digital finance. It provides targeted refinements to reduce complexity, gives firms clearer routes to market and helps well-governed innovation develop safely.
Response to the consultation was overwhelmingly positive and the Commission is taking forward a series of actions including:
- issuing new guidance supporting the tokenisation of investments and other assets, permitting the use of public blockchains for fund tokenisation, and clarifying the treatment of tokenised securities;
- removing rules preventing VASP licensees from providing services to retail customers, and removing extra environmental reporting obligations;
- providing regulatory clarity, for example that tokenised insurance-linked securities do not require VASP licensing;
- supporting the adoption of emerging technologies, including smart contracts; and
- introducing simple reporting requirements to help the Commission monitor digital finance activity in the Bailiwick.
The Commission will also work with the States of Guernsey to simplify and clarify parts of the legal and regulatory framework for digital finance businesses. The changes are designed to simplify licensing and enable existing investment and insurance licensees to carry out certain virtual asset activity under clear conditions, without the need for an additional VASP licence.
Deputy Director General (Policy and Supervision) Gillian Browning (pictured) said: “Guernsey is well placed to support responsible digital finance because it combines a flexible legal framework, strong professional expertise and a reputation for proportionate, effective regulation. This consultation has helped us identify significant practical steps which can give firms greater clarity while maintaining the standards expected of a trusted international finance centre. By doing so we are seeking to create the conditions in which well-governed innovation can take place safely and sustainably.”
Director General William Mason said: “We would like to thank everyone in industry, the technology firms and the professional services firms whose input has informed and strengthened the digital finance approaches we are launching today. The policies set out both simplify our regime and make clear how the Bailiwick provides an attractive regime for innovative digital business.”
