Mauritius Regulates Security Token Offerings with Licensing

Known for being home to many financial services companies, Mauritius is now eying to attract the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term company with the release of security token regulations.

Mauritian Financial Services Commission (FSC) has issued a full framework on Monday for security tokens and is also starting to license companies, thus creating a regulated environment for the much-sought Tokenization Tokenization Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Read this Term.

“As part of our core strategy, the FSC is aiming at positioning Mauritius as a regional hub of sound repute in the field of Fintech,” Dhanesswurnath Thakoor, the chief executive of the FSC, said.

“The publication of a Guidance Note on Security Tokens Offering (STO) and Security Tokens Trading Systems is another stepping stone in building an open and transparent regulatory regime for Fintech in Mauritius.”

Licensing will create a safe environment for the companies

With this, the off-shore African nation will allow security token trading platforms to apply for an FSC license. This will enable the companies to legally issue a token offering for security tokens, popularly known as STOs, as well as operate a trading house for such digitized securities in the jurisdictions.

However, the regulator is also cautious with the new technology-driven industry and risks associated with it.

The guidelines highlighted that the license holders need to follow a strict money laundering (AML) and countering the finance of terrorism (CFT) requirements. And, similar to the traditional exchanges operating in the jurisdictions, these platforms also have to publish daily trading data and seek review from the regulator.

Moreover, any licensed security token trading system needs to maintain a minimum of 35 million Mauritian rupees (around $880,000) as fiat reserve. They also need to partner with digital assets and traditional custodians for the safekeeping of their assets.

Similar to Mauritius, many other tax heavens including Gibraltar and Malta tried to lure blockchain companies in the past. The African country is now aiming specifically for the companies blooming in the regions of Africa and India.