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Gibraltar Finance Report
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How important is regulation when it comes to nascent industries like DLT? As mentioned, our DLT regulatory framework is key to giving companies regulatory cer- tainty. One of the reasons why we have at- tracted leading global firms, including several of the largest virtual asset services providers (VASP’S). In the last year, we have seen global players taking a close look at the industry, the opportunities, and risks and what they need in order for them to thrive.
Regulation in a nascent industry like DLT is imperative for wide acceptance because it sets out the guidelines and principles within which the industry is allowed to operate. Ideally, all regulatory bodies should ensure that innovation is encouraged and supported alongside clear and effective regulation. We have been updating our Distributed Ledger Guidance Notes to factor in evolving minimum standards in the virtual asset space. For example, the referred to “Travel Rule”. We have also convened a working group focused on understanding market integrity issues and to provide new guidelines for companies operating in Gibraltar. The result of this group’s work will see a 10th core principle added to the regulatory framework.
What developments are there in the pipeline for Gibraltar? We are talking to good quality firms, which will build on the momentum we have generated these past years. There are several areas
of particular interest. First, we are seeing a strong pipeline of license applications being considered by the Gibraltar Financial Services
Commission. We remain steadfast in our focus on quality as opposed to quantity. This continues to stand us in good stead and is drawing in other major international players. We are also seeing corporate activity as the firms continue to grow and develop. In recent months, we have seen Bitso raise US$255m to fund expansion in South America. Gibraltar start-up DAM raising funds through UK crowd funding firm, Crowdcube, to invest in further diversification of their product offering. Huobi donating US$1 million to UNICEF in crypto and
fiat the first time that UNICEF have accepted a crypto donation. There are several further significant and exciting announcements due in the coming months.
We are also seeing our funds Industry growing in this space too, leveraging on our reputation as a Hub for Blockchain business, and as a Jurisdiction for the establishment of Crypto Funds. The sector is touching all aspects of our traditional financial services community which is great to see.
We have entered into an agreement with Insurtech UK that will see greater cooperation between Gibraltar and the UK in this excit-
ing area that so complements our existing insurance industry. Finally, we continue to work with colleagues in the UK on the detail of the Gibraltar Authorisation Regime (GAR) establishing our post Brexit reciprocal market access arrangements and preserving our historically strong industry relationship in that market.
We have built these solid foundations over this time and the quality of the pipeline we are now seeing is really quite exciting.
What does the future of the DLT industry look like to you?
Increased interest from large players make it clear that blockchain and crypto are here to stay. When we first began regulating the space in 2018, few were willing to give companies, the platform they needed to develop
and integrate into the wider financial services community. Gibraltar had the foresight to recognise the potential of this technology but like any other financial service, there has to be regulation. Our strategy was to implement regulation in a manner that was innovative, pragmatic, protected consumers and worked for the sector. We will continue to apply our efforts to support the growth of the sector and
will reach out to learn, share and innovate with others wherever we can. I believe that there is great scope for Gibraltar and other jurisdictions in embracing this change and we are determined to continue to play our part in it.
www.gibraltarfinance.gi
10 Gibraltar International
www.gibraltarinternational.com