Isle of Man’s Bitcoin ambitions

The Isle of Man has a history for turning its hand at regulating new and controversial industries.

It became one of the first robust regulators of online gambling. It now has ambitions to become the world’s hub of regulated Bitcoin exchanges.

In case their flag wasn’t enough of a giveaway, the IOM is different to most countries. This tiny crown dependency sitting in the middle of the Irish sea has a population of just 90,000 yet is  home to more commercial-satellite operators than any other jurisdictions besides the US and Great Britain. It is also home to what is widely recognized as the world’s most dangerous motorcycle race, the Manx TT.

As for the flag…it bears the image of a triskelion; three dismembered and armoured legs joined at the groin. The triskelion is also on the IOM coat of arms, above a motto that reads Quocunque jeceris stabit, which translates to Whichever way you throw, it will stand.

The Internet has been good to the Isle of Man. They’re not the first small Island nation to try and change their fortunes by hitching their bandwagon to the online juggernaut. But it seems they have been able to do it better than most.

In the space of a few decades they have transformed their economy from relying primarily on three shrinking industries: farming, fishing and tourism, to a rapidly expanding economy where e-commerce comprises 20% of the island’s £4 billion GDP (online gambling half of that), and financial services 35%. GDP growth in the last 30 years has outpaced the UK’s by 300%.

Geography has something to do with this.  The Island sits on heavy-duty internet cables between England and Ireland, providing its few inhabitants and businesses with unusually powerful bandwidth. But the rest is down to Manx pragmatism.

Exceptional connectivity has been complimented with reliable electricity and world class data centers making it a logical choice for e-commerce companies. Low taxes and a Parliament that is fast embrace and regulate new industries is also a big plus.

Back when online gambling was the Wild Wild West, IOM’s Tynwald (name given to their Parliament) passed laws making the country one of the first regulators. The introduction of measures such as the requirement that operators to keep players’ funds separate from their working capital, to ensure funds protection helped legitimize what was seen in the mainstream as a dodgy industry.

Now they want to do the same for another industry with a mainstream reputation of being dangerous: Bitcoin and other cryptocurrencies.

In short time, the IOM have passed legislation and introduced a regulatory framework for cryptocurrency exchanges. They want to become the world’s Bitcoin hub. Already 25 digital currencies are based here—and that number is growing steadily.