Following a three year consultation period, Gibraltar has revealed it will be regulating Distributed Ledger Technology businesses. In doing this, the Government of Gibraltar has specifically stated that it doesn’t wish to stifle the growth and development of the industry, but instead intends to protect investors. The regulation, legal documentation and framework are available to the public and will see the companies themselves being regulated, as opposed to the technology or cryptocurrencies involved.
A Bill for an Act to amend the Financial Services (Investment and Fiduciary Services) Act was unanimously passed by the Gibraltar Parliament on the 6th of December, 2017, but some companies, such as Xapo, have already been granted an e-money license in Gibraltar.
The purpose of the approved amendment is to prepare the legal basis for the introduction of the new Distributed Ledger Technology (DLT) framework which will come into effect on the 1st of January through the Financial Services (Distributed Ledger Technology Providers) Regulations 2017, which were published earlier this year.
Albert Isola, the Minister of Commerce who presented the Bill, commented: “Gibraltar is one of the first jurisdictions in the world to introduce a regulatory framework for DLT businesses, thereby providing the regulatory certainty required by quality firms that we aim to attract to Gibraltar. I am aware that there are a number of businesses waiting to file their applications with the Gibraltar Financial Services Commission on 1st January 2018 and this is excellent news. This is an exciting time for our community, we are being recognised globally for the leadership and innovation we are showing. At the heart of our proposals is the protection of investors and the hard won reputation that Gibraltar enjoys, I will not tire in restating this. We have undertaken a significant amount of detailed consultation publicly and privately over a 3 year period to arrive at where we are today. My view remains that this represents a tremendous opportunity for long term sustainable growth in our economy in a new and exciting area. We will seek to develop excellent long term relationships with operators of the highest quality and integrity.”
The amendment altered the wording to include references to investors and customers in line with Gibraltar’s goal of extending the protection of investors whilst not restricting growth and innovation. These new regulations will come into effect on the 1st of January, 2018.