GUERNSEY Law and Practice Contributed by: Matthew Brehaut and Tom Carey, Carey Olsen
tems. Banks and payment service providers use blockchain technology to: • securely store customer information and transaction data; • improve transaction speed, thus ensuring that customer transactions complete quicker; • intercept suspicious transaction activity; and • reduce error handling. Guernsey is also ideally positioned to facilitate the transition to “tokenisation” of traditional financial assets that utilise blockchain technol - ogy. Please refer to 2.1 Predominant Business Models . 10.2 Local Regulators’ Approach to Blockchain The GFSC released a policy statement on its approach to fund tokenisation in May 2024. The GFSC’s overall position is to encourage tech - nology that enhances services to investors and increases the efficiency and effectiveness of operations in Guernsey. The GFSC also specifically notes that Guern - sey’s current regulatory regime permits fund tokenisation (ie, the register of holders of units in a Guernsey collective investment scheme may be maintained by using distributed ledger tech - nology and tokens issued as a digital representa - tion of the ownership of such units). The GFSC’s policy states that a private, permissioned block - chain must be used, under the control of the designated administrator of the scheme. The GFSC is familiar with blockchain technology and has analysed certain activities conducted in respect of blockchains. By way of example, the act of “mining” itself is not explicitly covered by the list of VASP activities in the LCF Law. However, the GFSC considers it likely that the
controller of a mining pool would require a VASP licence under the LCF Law, as they are highly likely to engage in VASP activities as part of business (including transferring shares of mining rewards to contributors to the pool, as well as potentially safekeeping and/or administration). Given that the controller of a mining pool is – in practical terms – validating and processing pay - ments, if they were not required to hold a VASP licence under the LCF Law then they will need to be licensed as a financial firm business, as they would be carrying out the activity of “facilitating or transmitting money or value through an infor- mal money or value transmission system or net- work” . Please refer to 2.2 Regulatory Regime . 10.3 Classification of Blockchain Assets Please refer to 2.2 Regulatory Regime and 6.2 Regulation of Different Asset Classes . 10.4 Regulation of “Issuers” of Blockchain Assets Please refer to 2.2 Regulatory Regime and 6.2 Regulation of Different Asset Classes . 10.5 Regulation of Blockchain Asset Trading Platforms Please refer to 2.2 Regulatory Regime and 6.2 Regulation of Different Asset Classes . 10.6 Staking Any entity providing staking services in or from within Guernsey would be regulated as a VASP. 10.7 Crypto-Related Lending Any entity providing crypto-related lending ser - vices in or from within Guernsey would be regu - lated as a VASP.
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