As perhaps one of the most publicly recognised applications of fintech, cryptocurrencies are virtual currencies that use cryptography to secure and verify transactions, and to control the creation of additional units. But fintech – a shortened form of ‘financial technology’ is broader than just cryptocurrencies.
Fintech also refers to computer programming and other technology that is revolutionising the delivery of financial services via digital applications; retail banking; and investment markets.
The term used by the Cayman Islands Government to describe fintech is ‘digital assets’. Particularly in recent years, financial services in Cayman have increasingly reflected the value of delivering products and services through digital assets. Some of the digital asset-related activities that take place within Cayman include crypto exchange services, initial coin offerings and fund-issuing tokens that exist in or originate from the Cayman Islands.
Government’s position on digital assets is similar to what is found in many other jurisdictions. It is actively developing a framework to regulate digital assets, in order to ensure that any risks associated with such activities are analysed and mitigated; and that any benefits are realised in a manner consistent with a well-regulated financial services jurisdiction. While Government works with CIMA, which is the jurisdiction’s financial services regulator, on the digital assets framework, CIMA has advised investors in the Cayman Islands to be vigilant in all dealings with digital assets.
For updates on the Cayman Islands’ digital assets regulatory framework, visit the Ministry of Financial Services website at www.caymanfinance.gov.ky or the Cayman Islands Monetary Authority’s website at www.cima.ky.