One year on: Digital Finance Initiative turns engagement into action

The Guernsey Financial Services Commission is marking the first anniversary of its Digital Finance Initiative, which has supported a programme of engagement, consultation and implementation designed to position the Bailiwick as a trusted jurisdiction for digital finance businesses.

Launched on 11 September 2025, the Initiative was established to encourage digital financial innovation in the Bailiwick, covering areas including digital assets, tokenisation, stablecoins and the use of technology across financial services.

Over the past year, the Commission has moved from consultation and engagement to make a series of changes and proposals designed to make regulatory expectations clear, provide practical routes to market and enable well-governed businesses to develop innovative propositions in the Bailiwick.

A significant part of that work was the Commission’s Supporting Growth with Digital Finance consultation, launched in December 2025. It sought views on how the Bailiwick’s regulatory framework could support digital finance while maintaining standards.

The consultation generated strong and constructive engagement from industry. Respondents highlighted the strengths of the Commission’s technology-neutral framework, risk-based regulatory approach and established anti-financial crime regime, while identifying areas where greater clarity and targeted changes could make it easier for well-governed businesses to offer new products and services.

Over the first year of the DFI, the Commission has made a number of changes to improve the Bailiwick’s regime.

Making the route to market clearer

The July 2026 package on tokenisation included practical proposals to reduce complexity and clarify expectations.

These included:

• guidance supporting the tokenisation of investments and other assets
• permitting the use of public blockchains for fund tokenisation
• clarification of the treatment of tokenised securities
• removing rules that prevent VASP licensees from providing services to retail customers
• removing additional environmental reporting obligations
• clarification that tokenised insurance-linked securities do not require separate VASP licensing and
• support for the responsible adoption of emerging technologies, including smart contracts.

In May 2026, as part of the DFI, the Commission issued an update to its Financial Crime Handbook to further support the use of technology to combat financial crime. These changes reflect the Commission’s intention to help firms make confident, responsible use of technology to enhance the effectiveness and efficiency of their anti‑financial crime controls. The amendments were aimed at removing uncertainty and to encourage innovation and investment in appropriate solutions which have the potential to both enhance efficiency and outcomes.

Engaging early with innovation

The Commission has continued to develop its Innovation Sandbox and Concierge, providing firms developing novel products, services and business models with a structured way to engage with the regulator at an early stage.

Updated information and frequently asked questions were published in April 2026, and in August 2026 the Commission licensed a further participant through its Innovation Sandbox, marking another milestone in the development of the initiative.

The Commission's Concierge offer has also been strengthened through the appointment of Peter Deacon as Guernsey’s first Finance Sector Concierge. The role provides an additional route for businesses considering Guernsey to understand the finance sector, connect with relevant public and private sector expertise and explore opportunities for growth.

Looking ahead: stablecoins and beyond

The DFI has also provided a forum for industry engagement through the Digital Forum, including roundtable discussions on stablecoins.

The Commission is now progressing work on a regulatory framework for stablecoins, with feedback and rules expected by the end of the year.

This next phase reflects the Commission’s approach to digital finance: engage early, understand the risks, provide clarity and adapt the regulatory framework where appropriate – without compromising standards.

Alice Joy, Director of External Affairs, said: “The first year of the Digital Finance Initiative has been about turning engagement into practical progress. We have listened to industry, improved the information available to firms and made targeted changes where greater clarity or flexibility can support responsible innovation.

“Being open to innovation does not mean lowering standards. It means making sure that regulation is clear, practical and capable of keeping pace with new technology. That is the balance Guernsey needs: open to serious innovation, clear about expectations and focused on maintaining trust.”

William Mason, Director General of the Commission, said: “Over the past year, the Digital Finance Initiative has demonstrated that a well-regulated international finance centre can support innovation in a practical and measured way.

“The overwhelming feedback we have is that innovative digital businesses do not want to operate in a lawless zone but rather want sensible and pragmatic regulations to create a framework around which they can confidently build advanced new ways to provide services to their customers.

“The work completed over the past year gives Guernsey a stronger platform on which to build the next generation of digital finance.

“The Commission will continue to work with its partners in government and industry to improve the legal and regulatory framework for digital finance, including its stablecoin policy work and opportunities to use technology more effectively to combat financial crime, while reducing costly administrative paperwork.”