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FinTech
Widespread endorsement for world pioneering token regulation Continued from p14
Gibraltar – whether they fast-track their approach based on Gibraltar’s regulatory approach, in much the same way as with gaming when people said that licensed Gibraltar-based businesses still needed to have separate licenses in those other countries. The US went one-step further and said you can’t have licenses here.”
He added: “Potential applicants, have the challenge of who they will have on the ground in Gibraltar – they can of course bring people to Gibraltar (which some of our clients have done), but also others are looking to hire people already here, and that is not easy to do.
You can’t have your operation just based out of the UK and have people here who don’t understand the sector. I am asked to provide potential candidates and most of those suitable are already in good jobs, so it needs to be a pretty good offer for them to consider it. We are developing a bit of an eco system where a lot of people are into blockchain and crypto.”
Joey Garcia, Isola’s Fintech lead partner, noted: “I find it absolutely amazing that every jurisdiction in the world is now an ‘expert’ in developing a regulated framework for this space; the reality is none have actually introduced it. Some are looking at [DLT] licensing as something that might fit within legislation for other purposes, but none are built from the ground up [as with Gibraltar] specifically for this particular sector.”
Underscoring Gibraltar’s DLT world leadership, Garcia added: “In the last 12 months I have had many enquiries and so far the feedback from clients is favourable and they love the fact that they can have an open
discussion with the regulator. They want to know if they need a license to show they are trustworthy!”
Jay Gomez, a funds specialist at Triay & Triay, stated: “It is important having a regulator that understands the business and interestingly how licensing of DLT has raised the profile of Gibraltar generally, not just in blockchain, but as a reminder to people that Gibraltar is there as a potential jurisdiction for them.”
Ransu Salovaara, chief executive of Tokenmarket and Revoltura, a Gibraltar company that creates and manages publicly traded, EU passported disruptive investment products, this year launched Europe’s first Bitcoin-backed Exchange Traded Instrument, BitcoinETI, listed on Gibraltar Stock Exchange (GSX) and traded on Frankfurt’s stock exchange.
$350+ raised in tokens
He noted: “We have raised almost $350m for our clients over the past 12 months, and those tokens are our responsibility. Just because a regulator has not asked for something, it doesn’t mean we should not have that infor- mation. Overall, blockchain transparency is super important.”
To date, most ICOs have been about currency, very few concerned with asset- backed accounts. Sandris Murins, strategy director, Iconiqlab, which helps launch tokens supported by real-world, sustainable business solutions, maintained:
“The logical next step is to record things on blockchain. I love the concept to store [license] applications, bank accounts, information packs and service providers in one place. When a company on-boards its activity to the blockchain, it has a complete snapshot of what has happened, and it means anyone wanting to deal with them doesn’t have to travel to Gibraltar to look at the books; with all transactions on the blockchain, they can just be sent a link and in that way regulate their activities.”
A major problem for Fintech businesses can be gaining bank accounts. NatWest Bank in Gibraltar is said not be interested in DLT, crypto currency or ICO-based business. Jyske Bank emphasised: “We won’t entertain any transactions linked to crypto, no matter whether they are licensed by the regulator.” Christian Bjørløw, chief executive, said: “They will have a major problem with all the banks in Gibraltar.”
Gibraltar International Bank (GIB) chief executive, Lawrence Podesta revealed: “We
are open for DLT businesses and take comfort that there is now some regulation covering the activity.” However, new bank accounts applicartions must come via its panel of locally based introducers, such as lawyers and accountants, who are expected to have conducted KYC (Know Your Customer) and AML compliance procedures.
Accounts desperation
Podesta asserted: “The accounts are only in fiat [regular] currency; we are not touching digital currency at this stage. We are getting a lot of enquiries, many from abroad and most are start-ups desperate for a bank account; there is clearly a pent-up demand. We are accepting around 5% of enquiries, around 15-20 from introducers.” He deemed DLT business loans “a bridge too far - at this stage”.
The BoE’s Real-Time Gross Settlement (RTGS) system that incorporates the former Chaps High value payment system, is being extended to “non-bank payment service providers”, including eMoney and Payment FinTech firms, without embracing DLT, believing the technology to be “not yet sufficiently mature”.
The GFSC signed its first cooperation agreement with the Hong Kong Insurance Association to offer mutual assistance in creating business opportunities for Fintech firms with a global reach and similar Memorandum of Understanding are envisaged with other countries.
Gibraltar Stock Exchange (GSX), set up in 2014 for funds and debt securities, declared it wanted the jurisdiction to become a “crypto harbour”. Late last year GSX formed, Gibraltar Block Exchange (GBX) as a subsidiary, and launched its own ‘Rock Token’ ICO, raising $21m in an early February private “pre-sale”.
Nick Cowan, GSX chief executive, was expecting another $6m to be raised in public offerings with the aim of creating "the world’s first licensed and regulated token sale platform and digital asset exchange" in the EU. There are several other token exchanges, unsupervised and unregulated, mostly in China.
Minister Isola said: “Critical for us is that we encourage and embrace innovation. There is a lot of, what has been referred to elsewhere, as s*** coins. We don’t want those businesses. In the same way as we are providing regulatory certainty to the blockchain community, we want to do so for ICOs.” Ray Spencer
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Gibraltar International
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