GUERNSEY Law and Practice Contributed by: Matthew Brehaut and Tom Carey, Carey Olsen
11. Open Banking 11.1 Regulation of Open Banking
10.8 Cryptocurrency Derivatives Any entity providing cryptocurrency derivatives in or from within Guernsey would be regulated as a VASP. 10.9 Decentralised Finance (DeFi) There are no specific regulations governing DeFi in Guernsey. Any entity facilitating the trading of security tokens or cryptocurrencies in or from within Guernsey would be regulated – either under the LCF Law or under the POI Law (depending upon the nature of the tokens). 10.10Regulation of Funds Funds that invest in blockchain assets are regu - lated within Guernsey’s existing fund regime. The GFSC exercises significant scrutiny over these funds. However, as mentioned in 2.1 Pre- dominant Business Models , a Bitcoin ETF has Virtual currencies are not defined or treated any differently to blockchain assets. Please refer to 2.2 Regulatory Regime and 6.2 Regulation of Different Asset Classes . The key factor is whether they are digital representations of fiat currencies or “native” tokens such as bitcoin. 10.12Non-Fungible Tokens (NFTs) Please refer to 2.2 Regulatory Regime and 6.2 Regulation of Different Asset Classes . An NFT will be considered “virtual asset” . The GFSC does not treat NFTs differently to any other kind of virtual asset in terms of licensing require - ments. been launched in Guernsey. 10.11Virtual Currencies
Guernsey is a leading international finance cen - tre. Open banking is recognised by industry as an opportunity to help boost both competition and the variety of products in the banking, credit cards, and payments space. Although there is no general open banking framework in Guernsey, there are no barriers to banks negotiating individual open banking- style standards and contractual terms with third parties (subject to complying with Guernsey law generally, including the data protection regime). A watching brief is currently being maintained by the States of Guernsey, the GFSC and wider industry on the success of open banking in the UK and local demand. Guernsey does, however, have various elements that are consistent with supporting open bank - ing. By way of example, although not a member of the EU, Guernsey has introduced the Sin - gle Euro Payments Area (Guernsey) Ordinance 2016, which enables Guernsey banks to partici - pate in the Single Euro Payments Area (SEPA) and therefore make euro payments to and from EU banks subject to the protections and support of the SEPA rules. Guernsey is also a recognised part of the UK payment system and, as such, offers the protections of that system. Guernsey has also developed a strong digital economy, becoming a world leader in connectiv - ity and digital infrastructure. Its data protection regime and legislation has also been assessed as fully compliant by the EC for the purposes of the EU General Data Protection Regulation (GDPR), meaning firms can rely on the free flow of data between Guernsey and EU member states.
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