Gibraltar Seeks To Encourage Blockchain Businesses
by Jason Gorringe, Lowtax.net, London
10 May, 2017
Gibraltar has released a draft regulatory framework for firms engaging in activities that use distributed ledger technology, often referred to as Blockchain.
A distributed ledger is a database that can securely record financial, physical, or electronic assets for sharing across a network through entirely transparent updates of information. It is used to record virtual currency transfers, among other things.
The new framework is intended to position Gibraltar as a jurisdiction that facilitates innovation and excellence in the financial technology sector.
The new framework will apply to firms who use distributed ledger technology for the transmission or storage of value belonging to others, and who are not subject to regulation under another framework. Firms and activities subject to another regulatory framework will continue to be regulated under that framework.
The proposed role of the Gibraltar Financial Services Commission, which regulates Gibraltar's financial services sector, will be to authorize and supervise distributed ledger technology firms. Consideration will be given to granting discretionary powers to the Commission's Chief Executive to impose appropriate conditions and restrictions, from time to time, to ensure the new distributed ledger technology framework principles are properly applied to this evolving nascent technology.
Initial costs of the framework will be funded from existing Commission resources, but the Commission intends to put in place a licensing regime to be sustained by annual license fee income. Initial application fees will be kept modest to attract new entrants and encourage start-ups to apply.
Interested parties are invited to comment on the draft framework by June 6, 2017.
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