The Gibraltar Financial Services Commission will publish a proposal for regulation of cryptocurrency on the peninsula in May. The document will spell out regulations for distributed ledger technology and virtual currency.
The Gibraltar Chronicle reported Wednesday that “Proposals for Distributed Ledger Technology Framework” will be released May 9 at the Digital Currency Summit at the University of Gibraltar. A clinic to address questions on the document and DLT has been scheduled for the following day.
Gibraltar, a British territory known for its tax advantages – sometimes seen as among the world’s most friendly to avoiders and evaders – has been planning for the wider adoption of virtual currencies such as Ether for at least a year.
“We have worked hard in thoroughly researching the opportunities that could accrue to Gibraltar by creating an environment that would attract and nurture firms that operate in this space,” said Commerce Minister Albert Isola. “We are also mindful of the risks that any new business line may bring and I feel that we have struck a great balance between the two.”
A first draft of proposed regulations was released for input from interested parties in January 2016. The comments that were made in response to “Virtual Currency: Outline Regulatory Framework” favored regulation by the Financial Commission, the rough equivalent of the US Securities and Exchange Commission.
“We actively encourage innovation by supporting those businesses looking to develop and introduce innovative ideas into the market,” said Samantha Barrass, chief executive of the Financial Commission. “The proposed framework will facilitate a progressive, well-regulated and safe environment for firms using DLT to grow, whilst also ensuring that this new regulatory environment protects both consumers and the good reputation of the jurisdiction.”
Gibraltar’s creation of the regulatory framework for distributed ledger technology and virtual currency comes at a challenging moment in the history of Gibraltar, positioned at the threshold of the Mediterranean and the Atlantic. Britain and Spain long disputed rights to Gibraltar’s territory, but Spain formally yielded in the 1700s and the distinctive rock became a British territory in 1830.
However, The Guardian reported that the prospect of Britain’s departure from the European Union throws the future of the nation into uncertainty. A recent announcement said the EU plans to give Spain more say over Gibraltar.
The announcement came in a draft document sent to member states in March, outlining negotiating guidelines for the upcoming Brexit talks. The Guardian said a senior UK source with knowledge of EU negotiations described the clause as extraordinary because it signaled a possible change from total British sovereignty over Gibraltar.