One of the real downfalls of cryptocurrencies has been the lack of Bitcoin regulations. While the new currencies are attractive to many users because of the lack of regulations and oversight, the fact that the main exchanges are unregulated is a real problem the hinders the growth, development and uptake of all alt coins.
For example, the collapse of Mt Gox, showed just how precarious the early infrastructure really is and just how much money is at stake.
Step forwards the Isle of Man!
In March 2015 the Isle of Man – a small island that has a very strong financial services sector and sits between the UK and Ireland – announced the world’s first Bitcoin regulatory framework.
The aim is not, of course, to regulate the currency, but instead to provide regulation for the companies that exist in the crypto currency ecosystem. If these infrastructure companies can become much more solid, safer and trusted, then the continued development of BTC and other alt coins can hopefully proceed quickly.
The Isle of Man is also interesting for tech startups because it has existing low tax or no tax rules in place for companies and individuals.
The Isle of Man already has a growing reputation for e-commerce and gaming and a workforce that has lots of international and tech skills. In fact, it is one of the leading rivals in the gaming space to Malta and Gibraltar. Many people will be hoping that this reputation combined with real rules will help to shed some of the reputation for crime that the currency has attracted.
The local government is hoping that these new rules will help to attract more startups and that the Isle of Man can be at the centre of the worldwide development of these currencies. It does seem to be very good news for everyone in BTC!
In early September 2015 a story emerged on Business Insider about Barclays Bank in the UK and their development and research efforts into the blockchain. More interestingly, while the interview was underway, staff from Her Majesty’s Treasury were in the building as well. It seems that the UK government is also taking a keen eye in the developments and how they can be used at a national and international level. The future is bright!
Update: May 2016
In early May 2016, the Isle of Man had another BTC coup when they announced the world’s first set of rules for Bitcoin gambling websites. This is really interesting because there are existing low tax jurisdictions that focus on gaming companies and their fees – such as Costa Rica, Malta and Gibraltar – but despite the headstart they have by already having the gaming firms present, IoM has jumped the queue and got in first! Only one country can be first at something.