Yesterday I attended the Digital Jersey Cryptocurrencies Workshop which was held at the St.Helier Town Hall. Having been to several Bitcoin meetups and talks (although no formal ones), I was hoping for a mix of the more overview statements about Cryptocurrencies, some dispelling of myths as well as just to get an idea of what the local business community already thought about this space.
The general objectives as stated by Advocate Vicky Milner (who was chairing the event as part of her role as head of the Digital Jersey Regulation & Legislation TAG) was to explain in brief what cryptocurrencies are, what the business opportunities for Jersey are, what we need to exploit said opportunities and what the concerns/risks are.
I was very pleased to such a mix of legal, financial, telco, private wealth & tech representatives in the room and that the level of questions asked were intelligent enough to be away from the standard ‘but isn’t this just fake internet money?” statements.
The format was that of 4 speakers, each with roughly 15 minutes to talk with a Q&A after the 2nd and 4th speakers. This worked fairly well as it allowed the audience to question and get clarification on points without all waiting until the end.
First up was Mark Loane (C5 Alliance) who gave a basic overview of Bitcoin, the separate elements (protocol, currency & network) and how it all works together. He then touched upon what he sees as the opportunities in Bitcoin; Hardware and Renting of Hashing Power, Crypto Exchange, ‘Smart Messaging’ via the Blockchain, Secure Document/Data via the Blockchain & Smart Contacts via the Blockchain.
Next was bit.coin.je’s very own Jon Day (Carpe Diem Accountants) who gave a very good talk on why Jersey needs to be researching Blockchain based technologies. He noted that traditionally businesses in Jersey provide services by acting as a ‘middle man’ and that due to the Blockchain being of peer-to-peer design, the need for a ‘middle man’ goes away. If this technology became more widespread, then certainly a lot of companies in Jersey would see their industry change. Jon also put forward the argument that due to the current lack of jurisdictions stepping forward to actively engage in creating a regulation framework to deal with Cryptocurrencies, Jersey could easily be looking at filling this void and therefore be able to influence the risks attached.
To go hand in hand with this, he mentioned that viewing Jersey as a potential centre for crypto-tourism, eGaming, Custody/KYC and development of Cryptocurrency funds would all help raise the profile of the digital industry of Jersey from a global point of view as well as utilising our existing strengths in the Financial/Legal industries.
His closing remarks were ‘If we are a financial and technology leader, we need to have an opinion and voice in the Cryptocurrency market’.
Mark Asburn (KPMG) then took the floor to explain his thoughts on what would actually be regulated if there was a case for regulation. He felt that mining, crypto to crypto exchanges & trading wouldn’t be appropriate for regulation but that crypto to fiat would potentially be an area to explore. The risk of regulation is that excessive regulation could drive away potential business (something that Jersey needs to be very wary of, especially in a new business sector). He also raised the question who exactly would be in a position to regulate it; if it fell under the JFSC then there would be an obvious additional cost on their end. The potential reputational risk to Jersey is also a concern due to even if Jersey’s businesses are transparent, Cryptocurrency in other parts of the world could produce a more negative light on the sector as a whole. Mark closed with the belief that a cautious approach should be used and that by continuously monitor what others are doing, Jersey could be ready to move into this at the right time.
Lastly Daniel Masters (Global Advisors) discussed how he sees Bitcoin from a Traders perspective, laying out arguments for the volatility not being a bad thing (other financial products are volatile) & how Global Advisors have been treating Bitcoin as a Commodity. They have been investing in Bitcoin for a while now and although they have seen massive returns, Daniel was very quick to point out that nothing they’ve invested was viewed as a ‘safe’ investment and that it could just as quickly drop. In the long term, Bitcoin could offer investment opportunities due to the diminishing supply – a comparison was drawn between forward oil curve/oil price curve from the early 2000’s to date.
After another round of Q&A, the following closing statements were given:-
Create a Jersey Cryptocurrency Exchange – Mark Loane
Look at it as a diversification product for the finance industry – Jon Day
If you want things to happen in this regard, be proactive & be specific: get out there, explain what you need and what you want to achieve – Mark Ashburn
Jersey should form a Bitcoin centre in St.Helier & create the Bitcoin Bank of Jersey – Daniel Masters
A second workshop will be organised by Digital Jersey this Autumn, we will update you with details closer to that time.