Jersey issues new guidance on asset tokenisation and initial coin offerings

Tokenisation is the practice whereby blockchain tokens are issued to represent certain real financial assets, including equities, units in a fund and bonds. The JFSC says tokenisation can provide the finance industry with benefits such as liquidity, accessibility and transparency. The new guidance is being issued in response to these potential benefits and growing demand for tokenisation.

The JFSC describes the guidance as 'principles-based’ with ‘a substance-over-form approach', requiring issuers of tokenised assets to consider the nature of the underlying asset, product and activities when submitting their application.

The regulator has also published updated guidance on initial coin and token offerings, refreshing the original July 2018 guidance to reflect the changes in terminology in the past six years.

The JFSC says it 'will continue to respond proactively and collaboratively to developments in the tokenisation space so that Jersey can continue to benefit from this innovation, while also meeting international standards in fighting financial crime'.

Separately, Jersey's government published a national risk assessment of virtual assets service providers (VASPs) in the jurisdiction in May 2024. This followed the VASP risk overview completed in 2022.

Sources

• JFSC
• JFSC (tokenisation guidance)
• JFSC (guidance on initial coin and token offerings)