Regulation is the only way: Gibraltar aims to become ‘Blockchain Rock’
As this year comes to a close, we can reflect on some major breakthroughs in the development of cryptocurrency and the blockchain technology that underpins it.
One such breakthrough, which has been met with ‘for and against’ viewpoints from all areas of the electronic financial markets spectrum was the adoption of Bitcoin as a national currency by Central American country El Salvador. In doing so, not only did El Salvador make it possible for the nation to begin investing and storing Bitcoin at government level, but it also empowered 70% of its previously unbanked population who have suddenly risen from the depths of an agrarian economy to being truly global citizens with absolutely every possible option for employment, commerce and investment at a touch of the screen on a smartphone.
Whichever way this is looked at, it was a major revolution.
Now, other nations are looking to become global cryptocurrency centers, and the most recent example of this is Gibraltar.
Gibraltar, a British Overseas Territory off the coast of Spain, is already a financial markets center to some extent.
Not only does it have a tax advantage over many European neighbours and therefore is a popular jurisdiction for traditional investments, but in the early 2000s, many bookmakers and online gaming operators moved to Gibraltar to benefit from operating in a regulated jurisdiction with a favourable corporate tax regime.
This corporate tax regime for non-resident controlled companies was phased out by January 2011 and replaced by a still favourable fixed corporate tax rate of 10%. Therefore, for the last twenty years, Gibraltar has a combination of traditional investments which have been in place for decades and electronic markets as well as developers of online platforms.
Now, Gibraltar has stepped its game up even further and is preparing to become a cryptocurrency hub.
According to many observers, the move toward becoming a fully regulated cryptocurrency hub is partly being invoked due to a need for Gibraltar to shrug off its reputation as a tax haven, however this is a great move as it modernizes the country’s image as an electronic financial markets center for the avantgarde investor. Gibraltar’s regulator has so far approved 14 cryptocurrency and blockchain firms for its licensing scheme which is definitely the right way forward.
CoinMetro has been licensed from the outset, and regulatory frameworks for cryptocurrency as well as full adherence to fiscal regulations is a key tenet of importance. We understand that the sustainability of cryptocurrency and digital asset trading is only viable via licensed and fully regulated platforms, venues and jurisdictions.
Previously dogged by a reputation for less than stringent anti money laundering (AML) procedures, Gibraltar is on the right track toward gaining a more upright standing, the country insisting that it has welcomed crypto firms carefully, having consulted on its regulation for the sector for four years before introducing it in 2018, helping it to secure a reputation as “Blockchain Rock”.
Therefore, with such movements toward regulation, it is a difficult task for unregulated crypto exchanges to suddenly change their ethos and product range in order to comply. This has been the downfall of a few large exchanges this year.
CoinMetro’s ethos since its establishment has been to operate as a regulated exchange with full adherence to financial markets rulings and to develop its product range and move toward blockchain-related projects and access the entire cryptocurrency ecosystem via a sustainable and exponentially growing structure.
It’s the only way forward!