Mauritius to introduce custodian-licensing regime for digital assets

The Mauritius Financial Services Commission (FSC) announced, on 8 February 2019, that a licensing framework for the custody of digital assets had been finalised and would come into effect on 1 March.

It said Mauritius was the “first jurisdiction globally to offer a regulated landscape for the custody of digital assets”. Mauritius facilitated the recognition of digital assets as an asset class for investment “by sophisticated and expert investors” in September.

The final licensing framework is to be published in full in the government gazette on 1 March, but a November consultation paper listed a series of conditions for licensees, including statutory reporting and disclosures to clients, a minimum of reserve assets and a ‘comprehensive’ risk management programme.

Custodians would also have to follow guidelines for storage of digital asset keys and seeds, demonstrate security procedures for onsite cold storage of assets and have in place a system for detection and reporting of suspicious transactions.

The FSC said it had engaged with the Organisation for Economic Cooperation and Development (OECD) on the governance and regulation of digital assets and indicated that holders of the digital asset licence would be mandated to comply with the anti-money laundering and counter-terrorism funding rules “in line with international best practices”.

Mauritius Prime Minister Pravind Kumar Jugnauth said: “In revolutionising 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.”