Gibraltar, a British overseas territory, has adopted Distributed Ledger Technology (DLT) friendly legislation in recent months. Now, they have granted licenses for several known crypto companies, as Gibraltar’s trade minister Albert Isola says the government is aiming to create a “supportive environment” for the sector.
Gibraltar’s Welcoming Legislation for DLT Explained
In January 2018, the Legislature of Gibraltar implemented the Digital Ledger Technology (DLT) framework. The new regulations were designed by industry experts and lawmakers to attract businesses in the technology sector who focus on DLT, while also ensuring the protection of customers and users alike.
According to Albert Isola— Gibraltar’s Minister of Commerce— several DLT licenses have been awarded to leading blockchain firms.
They include the following:
- Huobi – the fourth largest exchange by daily trading volume
- Coinfloor – the oldest UK-based cryptocurrency trading platform
- Covesting – a cryptocurrency exchange in Europe
- The Gibraltar Blockchain Exchange (GBX) – which is operated by the local stock exchange
- Etorox – a digital asset platform
Gibraltar has also established a trade association for the DLT industry. The Gibraltar Association for New Technologies (GANT) facilitates the development of formal relationships between legal authorities and DLT-based companies.
Isola is also a member of the British parliament. He went on to emphasize that the new legislation was designed to remain flexible given the fast-moving developments of the larger cryptocurrency industry.
How Gibraltar is Competing to Become a DLT Safe Haven
Gibraltar is just one of many territories in Europe which has taken considerable steps to provide a clear regulatory framework for digital assets.
In 2018, the Maltese Parliament passed three bills into law, creating the world’s first regulations for cryptocurrencies. Since then, Malta has had the reputation as a global leader in digital asset legislation.
Other countries such as Germany, Switzerland, and Estonia have made considerable advancements in legislation for digital assets.
In the United States however, SEC Chairman Jay Clayton has suggested that virtually all ICOs— and their corresponding ‘utility tokens’— constitute securities. The SEC’s response has shut down any hopes of modifying the existing laws to accommodate for new technology.
Instead, securities are securities, says Clayton, regardless of their underlying technology. And they therefore must abide by the existing securities laws.
Some industry leaders agree with this, while others— even US lawmakers— refuse to accept it.
Regardless of differing opinions, one thing is certain. To avoid any regulatory ambiguity, many companies are turning to security tokens when tokenizing real-world assets.
Numerous security tokens already exist and are SEC-compliant. Equity, real estate, investment funds, and fine art have all become tokenized in a transparent and compliant manner.
Even professional sports in the US have expressed interest in tokenizing ownership.
The clear regulatory framework found in the US market for security tokens is estimated by some to lead to a $200 billion market cap in 2019.
What do you think of the current regulatory situation for digital assets? Will different jurisdictions collaborate on a unifying set of laws, or will different countries continue to compete in hopes of attracting business? Let us know what you think in the comments section below.
Image courtesy of Pixabay.