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Cayman Islands Opens Doors for Comments on Proposed VASP Amendments

Representing the financial services industry in the Cayman Islands, Cayman Finance has approved the Ministry of Financial Services’ proposed amendments to the Cayman Islands Virtual Asset Service Providers (VASP) act.

The Ministry has chosen to utilise GitHub, the software coding collaboration platform, as one of the options to collate public feedback on the draft legislation. The comment period for proposed amendments to the Cayman Islands jurisdiction’s VASP Act closes on 20 March 2024.

GitHub is an online collaboration tool that is well-respected and trusted by the international tech community and an intuitive platform for VASPs to provide feedback during the consultation process of this proposed legislation.

Innovation and transparency
Steve McIntosh, CEO of Cayman Finance
Steve McIntosh, CEO of Cayman Finance

Steve McIntosh, CEO of Cayman Finance, said this new approach to “open source” consultation reflects a commitment to innovation and transparency that are hallmarks of the Cayman Islands financial services industry.

“GitHub makes it easy to propose and track edits to any text, a bit like collaborating on a Wikipedia article. While it is normally used for writing software code, it makes all the sense in the world to use GitHub for legislative consultation. After all, you could think of our laws as the source code for our national operating system. The more input we receive, the better the final version will be. And the easier we make it for stakeholders to provide that input, the more we will receive. It really is a win-win.”

Global leadership in virtual assets

The Cayman Islands is the world’s largest investment fund domicile after the United States and one of the most popular locations for funds with digital asset strategies. According to PWC, nearly
40% of traditional hedge funds invest in digital assets and Cayman is also home to leading companies in the so-called Web3 developer space including Chainlink and Sam Altman’s Worldcoin.

Further growth in the sector is expected this year. Exchange-traded Bitcoin products were just approved by the SEC (Securities and Exchange Commission) in January and a Bitcoin ‘halving’ is anticipated in April. Year-on-year Bitcoin value grew by more than 142 per cent and some analysts have even suggested that growing inflows into virtual assets could threaten gold’s status as a leading store-of-value.

By updating its legislation, the Cayman Islands is positioning itself to stay at the forefront of this burgeoning sector while maintaining appropriate regulatory safeguards. Utilising a tech-savvy consultation approach that fosters collaboration in a more efficient manner was a natural progression to consider for this new legislation.

Soliciting expertise

Cayman Finance encourages all interested parties, including industry stakeholders, legal experts, and members of the public, to participate in this consultation process on GitHub. Contributors can also review the draft legislation, provide feedback, and engage in constructive dialogue to shape the future of VASP legislation in the Cayman Islands.

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