Industry insiders believe the proposed licensing of digital asset custodians by Mauritius as part of the country's ambitions to be a FinTech hub is a 'win-win' opportunity for the island nation and the blockchain industry
According to Mauritius' Financial Services Commission (FSC) a framework that sets out the rules for licenses to be issued for holders to provide custody services for digital assets will come into effect on 1 March 2019.
The country had earlier established the International Financial Centre (Mauritius IFC) as the FinTech hub, in and for, Africa. It later recognised digital assets as an asset-class for investment last September and prepared a consultation paper for stakeholders and the public to give feedback on the proposed regulatory framework two months later.
"I think that custodianship in the blockchain and crypto world is essential for the large scale adoption of this technology," said Suyash Sumaroo, founder of a Mauritius-based start-up and software solutions provider Codevigor.
"Removing all the regulatory uncertainty concerning this aspect of digital assets will surely encourage more companies to set up their activities in Mauritius and encourage Mauritian start-ups to take advantage of this regulation. So, it's a win-win situation."
According to the FSC, by March, the Mauritius IFC would be the first jurisdiction globally to offer a regulated landscape for the custody of Digital Assets.
Holders of the Custodian Services (Digital Asset) License would be able to provide custody services for digital assets.
Loretta Joseph, FinTech and regulatory consultant to the FSC, said, "Forward-thinking and innovative regulatory frameworks and policies will see innovation and economic growth bolster (in) the region."
Joseph, who also serves as a blockchain advisor for the Organisation for Economic Cooperation and Development (OECD) and a FinTech advisor for Bermuda, added: "We must harvest the opportunities and mitigate the risks associated with emerging technologies. We must allow innovation but stop nefarious players entering this space. Sensible and responsible regulation is the key."
Custody is key in ensuring digital assets are secure and protected, and that regulation is imperative to supporting the development of a new asset class she said.