1st August 2014

Jersey’s Bitcoin fund is launched

Jersey took a step towards the financial future when the Jersey Financial Services Commission certified the Global Advisors Bitcoin Investment Fund, allowing pension companies and other large-scale investors to buy cryptocurrency as part of their portfolio investments. This made Jersey the first jurisdiction in the world in which a Bitcoin investment fund gained approval from regulators.

The certification came as a local industry body was campaigning to make Jersey a “Bitcoin Isle”, on which widespread acceptance of digital currencies would bring more business – and promote banking services – to the island.

Bitcoin already in use

The BBC had reported the previous month that “Tiffin tearoom on St Helier’s waterfront already accepts Bitcoin. Owner Giles Day said: ‘It is fast, reliable and a very secure payment method. It is the way of the future. It is what the digital and finance industry will be using and those two industries are key to Jersey.”

One of the benefits for small businesses is that the decentralised nature of cryptocurrencies means there are no associated charges, whereas they need to pay merchant fees when using credit or debit cards.

Physical Bitcoins

Although digital currencies like Bitcoin don’t exist in any physical manner, as they are merely long strings of computer code, a plan to mint tangible Bitcoins had been proposed on Alderney. It had asked the Royal Mint to produce the coins, each of which would be partially pressed using gold. That way, if the value of the cryptocurrency collapsed, the coins could be melted down and the precious metal extracted so that investors could recover some of their losses. The BBC reported in May 2014 that the Royal Mint had declined to be involved in the venture.