Tuesday 10 June 2014 6:26 am

Bitcoin receives red carpet welcome in the Isle of Man

Digital currencies have received a ringing endorsement from the government of the Isle of Man.

The crown dependency has announced it will be taking specific measures to protect businesses and customers utilising digital currencies, such as Bitcoin.

"Our stance is intended to welcome those who can meet the necessary standards while also preserving the Island’s good reputation as a financial centre", said director of E-Business Development, Peter Green.

The government has instructed departments and statutory bodies to ensure there is a regime that promotes business opportunities but also adheres to anti-money laundering requirements.

Thanks to the fast changing nature of the world of cryptocurrencies, market changes will be kept under review.

The minister for Economic Development, John Shimmin MHK commented: "The Isle of Man is synonymous not only with innovation, but for a regulatory environment that is both effective and pragmatic."

Shimmin believes the move will bolster the island's status as a business friendly jurisdiction. "We will work with the business community in the coming months to ensure that a proportionate and appropriate regime is implemented that meets international standards", he added.

However, the Isle of Man is clear that it does not intend to regulate digital currencies as such, rather it is making sure that digital currency businesses are subject to the same money laundering legislation as everyone else.

To the relief of Bitcoin fans, the government has decided not to introduce a full regulatory regime. The government's press release said such a regime would be costly and would quickly be made redundant by the rapid innovation taking place in the sector.

Furthermore, because the Isle of Man is in a customs union with the UK, activities related to the mining and exchanging of cryptocurrency will not be subject to VAT.

In the FAQ part of the press release, the government cites the benefits of accepting digital currency businesses, including jobs and income to the island, as well as creating enhanced career opportunities.

The Isle of Man's relatively liberal stance toward cryptocurrencies stands in marked contrast to the more draconian attitude taken by Chinese and US authorities.