In an effort to create a FinTech hub that is both situated within and meant for the continent of Africa, Mauritius plans to license custodians for digital assets starting in March.
On Friday, the Financial Services Commission of Mauritius announced that as the necessary groundwork has been completed, the plan will be initiated at the start of March.
The framework which the new custodial services are based upon was first published as a draft in November of 2018, and since then have been finalized. The FSC’s goal for the framework is to lay down the ground rules for how the custodianship will occur.
A licensed custody service will have to abide by the rules set forth by the framework which is something, unlike anything we have ever seen. Not only does this move create a basis upon which cryptocurrencies can come into more official use within countries under the framework’s jurisdiction, but it is also unprecedented the world over.
According to Pravind Kumar Jugnauth, Prime Minister of the Republic of Mauritius, this move is meant to illustrate the country’s dedication to the growth of its economic growth and sees digital currency as a necessary part of that future growth.
The framework as described in the government-published consultation paper outlines a number of stipulations that will have to be followed by cryptocurrency custodians. Anyone with a custodian license will also have to adhere to anti-money laundering and anti-terrorism funding regulation. The goal of including these elements is meant to make it easier for the framework to eventually expand its jurisdictional reach.
Also included among the many stipulations governing digital currency custodians are rules stating that custodians must report to their client’s information needed to assess risk, such as minimum reserve assets among others.
Guidelines for how digital assets are stored in another area that the framework seeks to impose. All licensed custodians will have to prove that they have both the technology and knowhow to ensure their clients that the digital currency being held is as secure as possible. A comprehensive plan for securing assets while at the same time detecting threats to those assets will be standard practice.
A future for crypto assets in the region
While the FSC is the organization behind this new measure, they did not come up with all of the guidelines on their own. The FSC worked closely on the framework alongside members of the Organization for Economic Cooperation and Development, among other groups, meaning that this move is meant to secure future stability for the region that a diverse group of interested parties can benefit from.
The recognition from the FSC that digital currencies should have asset-class worthy of legal investment opportunities is largely the event that spurred all of these new changes in policy. And that recognition came as a result of the Mauritius government’s plan to become a leader in financial innovation by following innovative approaches and practices.