The world's first license scheme on blockchain launched in Gibraltar

World
Europe

Gibraltar, a tiny British enclave on the southern tip of Spain, has claimed a regulation that has big impact. Its financial services watchdog has introduced the world’s first bespoke license for firms transmitting money or assets using blockchain or distributed ledger technology.

Gibraltar, the UK /VCG Photo

The intention is to provide regulatory certainty to a system that today across the world is unregulated. Gibraltar has spent three years getting prepared, and since January 1, 2018, the world's first government-issued license scheme on blockchain has taken effect.

Blockchain is a shared electronic record database which is linked and secured using cryptography. Because of its resistance to data modification, it is popular with tracking cryptocurrency, and was initially used as a core component of bitcoin public transactions.

With this new license, financial tech companies and start-ups which utilize blockchain will have no hesitation before they come to Gibraltar.

That’s because this license will regulate blockchain usage, provide consumers with a safety net and lend companies credibility.

VCG Photo

The companies will benefit from having certainties under the regulatory framework which has been built specifically and tailored to their characteristics.

Start-ups and firms which use blockchain for monetary transactions potentially put themselves in direct competition with banks.

Some say that it should be the banks themselves to take the risks because of the cyptocurrency bubble.

But Commerce Minister Albert Isola says that banks are limited by their own regulations. This new blockchain license is to ease the playing field, and for Gibraltar to continue to grow its financial services industry after Brexit in 2019.

There is no doubt that Gibraltar is at the forefront when it comes to governmental supervision on blockchain. Risks can be controlled when government and companies collaborate. With the financial industry being one of Gibraltar's most important, it’s clear that it will continue to keep it a secure place for all consumers.

9686km