Laws needed so island can benefit from 'next big thing'

But the island needs to develop legislation to cover potential risks, prevent criminal activity and to protect the integrity and stability of existing financial services, according to a local lawyer.

'There is no escaping that crypto currency has a very real potential to be the "next big thing", not only as it becomes more widely accepted, but also as a potential investment,' said AO Hall partner Paul Buckle, who spoke at a dedicated conference on digital currencies organised by his firm in conjunction with Maitland Chambers.

'By establishing a regulatory framework in Guernsey it will enable the promotion of innovation by enabling technology-driven changes to traditional financial products and services.

'Given that the law surrounding crypto currency is non-existent, one would need to apply traditional antiquated legal concepts of "money" and, arguably, "property" to the concept of crypto currency. Until legislation is developed in this area, this will lead to uncertainty regarding how it ought to be treated.'