A mechanism designed to protect clients of cryptocurrency firms in Gibraltar, and its own reputation, went into effect on January 1. The regulation targets blockchain technology – companies that store and transmit value must now be licensed by the Financial Services Commission (GFSC).
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Gibraltar – “World Premiere”
The regulatory framework for digital ledger technology (DLT) was introduced after Gibraltar’s legislature last month approved a bill to update its financial services regulations. It laid the groundwork for new legislation governing the cryptocurrency industry in the territory, with financial services and online gambling still seen as the main pillars of the economy.
“We’re really excited to finally welcome applications from DLT vendors. We expect to be very busy in the coming months, ”said Nicky Gomez, Head of Risk and Innovation at GFSC, quoted by the International advisor. “We look forward to working on interesting and innovative ideas with applicants,” he added.
Gomez pointed out that the GFSC has become the first regulator to introduce a DLT regulatory framework in collaboration with the financial services industry and the government of Gibraltar. “It’s a very encouraging time and we look forward to the challenge,” said the official.
True, Unmatched in Europe
As a British Overseas Territory, Gibraltar has a fairly independent legal system from the United Kingdom. This allowed it to develop its own government policies and economic priorities. Gibraltar has attracted financial and sports betting and online gaming firms to its jurisdiction with corporate tax incentives and relaxed regulations unmatched by others in the EU.
In December, the 17-member local parliament modernized the territory’s financial services legislation with a newly adopted bill. It paved the way for a comprehensive set of rules addressing the challenges presented by cryptocurrencies and governing the operations of companies in the sector. In doing so, Gibraltar has made progress in realizing its intentions of positioning itself as an attractive location for crypto firms. They could actually build a whole new pillar to support its economy. And Gibraltarians, in turn, may completely forget the days when the former British shipyard made up more than half of their economy.
For God, Queen … and Territory
In its latest initiative in this direction, Gibraltar defined certain principles designed to protect the rights and interests of consumers, as well as its own reputation. All licensees will have to follow them. For example, every DLT provider must communicate with their customers in a fair, clear and non-deceptive manner and give due consideration to the risks to their business and customers. Companies must also have effective arrangements in place to protect customer assets and money, including “contingency, disaster recovery and crisis management plans”.
Thus, Gibraltar obviously takes no risk. A notification on the The GFSC website clearly indicates that from January 1, 2018, any use of distributed ledger technology to store or transmit values belonging to third parties will have to be authorized by the Commission. By the way, the following entries: “Initial Application Assessment Fee”, “Application Fee”, “Additional Fee”, “Annual Fee”, “Additional Fee”, fill in a list between “Principles” and the “Frequently Asked Questions. “questions” sections.
Welcome to Gibraltar! Oh, and don’t feed the monkeys, please!
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