It become the first territory in Europe to regulate blockchain
Blockchain, the digital ledger technology behind bitcoin and other cryptocurrencies, has been regulated by The Gibraltar Financial Services Commission (GFSC).
Gibraltar, a British overseas territory which has its own legal system that is independent from the United Kingdom, is the first territory in Europe to regulate Blockchain. In December, the local parliament modernized the territory’s financial services legislation with a newly adopted bill. It paved the way for a comprehensive set of rules addressing challenges presented by cryptocurrencies and governing operations of companies in the sector.
GFSC’s regulatory framework for digital ledger technology came in to effect on the 1st of January 2018. The regulator has laid out nine principles for licencees designed to protect consumers and Gibraltar’s reputation.
An example of the new legislation states that every DLT provider should communicate with its customers in a way which is fair, clear and not misleading and have proper regard to risks to its business and customers. Companies must also have effective arrangements in place for the protection of client assets and money, including “contingency, disaster recovery and crisis management plans”.
Gibraltar firms which use blockchain to store or transmit value belonging to others, now must apply for a licence from the GFSC, the regulator said in a press release.