Mauritius will soon to approve digital asset custodians as per its plan to create a fintech hub “in and for” Africa. As per the official announcement published on Friday, the Financial Services Commission (FSC) of Mauritius is all set to establish a regulatory framework for crypto custodian services on March 1st, when the Mauritanian FSC first released a draft of this framework in a consultation paper on Nov. 5, 2018. The framework will roll out the rules for a license which will allow the holder to provide custody services for digital assets. The island nation is aiming to enable users holding crypto assets to have a due level of safety under the regulation for custodian services for digital assets.
According to the FSC, this step will make Mauritius the “first jurisdiction globally to offer a regulated landscape for the custody of digital assets.” The prime minister of the Republic of Mauritius, Pravind Kumar Jugnauth quoted:
“In revolutionizing the global FinTech ecosystem through this regulatory framework for the custody of Digital Assets, my Government reiterates its commitment to accelerating the country’s move to an age of digitally-enabled economic growth.”
On the other hand, the Chief Executive of the FSC Harvesh Seegolam said:
“The new regulatory framework is established to comply with the application framework for [Anti Money Laundering] AML/CFT [combat financing terrorism] in line with international best practices. The FSC is committed to implementing enabling frameworks which facilitate the development of the Mauritius IFC.”
Looking at the statement, it is quite evident that FSC was in consultation with Organisation for Economic Cooperation and Development (OECD) on the governance and regulation of digital tokens whose effort guided the development of the new licensing rules. The regulatory consultant to the FSC, Loretta Joseph said:
The process has been “collaborative across industry stakeholders, policymakers and the regulator. This regulatory framework reiterates the stance taken over the last year to be a forward-thinking and innovative nation that can lead appropriate and sensible regulation for the region.”
There might be changes in some aspects in its final form, consultation paper published in November, have a series of stipulations for licensees which includes statutory reporting and disclosures to clients, “comprehensive” program for risk management and a minimum of reserve assets.
The crypto custodians will have to be compliant towards the guidelines laid by the regulatory framework in order to demonstrate security procedures for onsite cold storage of cryptocurrencies and have in place a system to detect and report the suspicious transactions and storage of cryptocurrency keys and seeds.