The financial service industry in Cayman is well positioned to support this new decentralised economic model, and the Cayman Government is working hard to analyse and develop sensible measures for blockchain innovation to thrive.
The financial services industry in Cayman is well positioned to support this class of digital assets with both decentralised and centralised economic models. The Virtual Asset (Service Providers) Act (2020) has introduced a framework to regulate digital assets and ensure that any risks associated with such activities are analysed and mitigated, that any benefits are realised in a manner consistent with a well-regulated financial services jurisdiction and that sensible measures are developed for blockchain innovation to thrive. It is widely speculated that this new technology has the potential to disrupt the current global economic model by providing a more effective engine for the flow of intangible assets across borders. In these early stages, the process of investing in cryptoassets is being fine-tuned, but the basic procedure is to (i) purchase, (ii) transfer, and (iii) store a crypto asset(s), as follows:
(i) Purchase: Open an exchange account (e.g. Bitfinex, Gemini, Coinbase or Bitrex) and fund your account with a fiat currency.
(ii) Transfer: The most secure way to store cryptoassets is within an application known as a digital wallet. Leading examples include hardware wallets such as Ledger or Trezor and hot wallets like MetaMask for Ethereum cryptoasset storage solution. The wallet has a deposit button which appears as a random set of characters. This is known as your public key (think username). The exchange will have a withdrawal function requiring your public key to send blockchain transaction instructions moving cryptocurrency under control of the user’s public-private key pair to a chosen recipient address. Once the transaction is executed on the exchange, a global network of computers (representing the decentralised governance) will process the transaction and publicly confirm its successful completion.
(iii) Store: Your cryptoasset is now stored under the control of your public-private key pair. The keys are held in your digital wallet while the cryptoassets remain on their relevant blockchains, ready for you to make purchases to another wallet or initiate further transfers.
Anyone looking to secure large values of cryptoassets should first speak to a technical expert as transactions can be practicably irreversible. For more information on Fintech please see this page.