February was a bumper month for crypto and the wider distributed ledger technology (‘DLT’) industry in Gibraltar. With three events held during the month that focused on the burgeoning fintech industry in Gibraltar, it was left to GibFin to conclude the conference programme for February at the Sunborn.
Over the last year or so, Gibraltar has emerged onto the global fintech scene and established itself as a leading light with a particularly strong focus on the cryptocurrency business, which has caught the imagination of an increasingly mainstream audience with the headlines captured by the main drivers of growth in the industry; Bitcoin, Ethereum, Ripple, IOTA – 2017 was the year when these projects truly hit the big time.
Beyond cryptocurrencies themselves, and the increasingly popular use of token sales or, as they are referred to by most, ICOs (which is an acronym for Initial Coin Offerings, itself a crypto play on the classic Initial Public Offerings, or IPOs), Gibraltar has also taken great strides towards becoming an international centre of excellence for the wider DLT space, becoming the first jurisdiction in the world to create a purpose built regulatory regime built around DLT financial activity.
Set against this backdrop, over 200 delegates converged in the ballroom in the Yacht Hotel where a number of exhibitors had set up their stands, with Abacus and Gibraltar’s longest established law firm, ISOLAS LLP, offering goodies and information about their services to all who attended during the two days. The main stage was set in the room with the exhibitors, and plenty of other sponsors set up camp in a number of the breakout rooms, where coffee was served to aid conversation.
The Chief Minister, the Hon Fabian Picardo QC MP, was called upon to welcome all guests who had travelled to Gibraltar from all over the world and to formally open the event. The Chief Minister was clear about Gibraltar’s determination to apply to this exciting new industry the formula that Gibraltar applied to the telephone/online gambling business back in the early nineties.
The Chief Minister explained, “We [Gibraltar] are only interested in entrepreneurs and businesses which hold their reputation is as high a regard as we hold ours.” He explained that it had been a focus on strict regulation that had been the key ingredient in Gibraltar’s success as the capital of global online gaming, a place where only the best businesses have come to set up, and that the protection of our reputation would be the foundation on which we would build success in this new and exciting area of business too.
The Hon Albert Isola, the Minister for Commerce, then addressed the delegates and talked briefly about what Gibraltar has done in this space so far, why we’ve done it and what it is that Gibraltar is looking towards, what it hopes to achieve, as we move forward in this business. He thanked the Gibraltar Government working group and the Gibraltar Financial Services Commission for working hand in hand with the Government over the last three years and highlighted how Blockchain technology is a technology that can offer solutions not just in financial services, although that seems to be the key focus of it today.
Mr Isola explained that Gibraltar is “serious, professional, committed”, and echoing the words of the Chief Minister, that “we have done this before. We’re taking what we did in gaming and we can flip it into the DLT space – mind and management has to be in Gibraltar and we believe the model works. What is critical is that we encourage and embrace innovations, standing tall in the Blockchain community as a standard bearer of quality and regulation.”
The next phase in the story, he continued, was the development of a tailored regulatory environment for Token Sales – “we want good token sales, not the bad ones”. He announced that a policy paper in this regard would be published early in March.
The event then welcomed a series of speakers presenting on key and topical issues for the industry, including a panel on legal and regulatory developments. Present on the panel was Joey Garcia, the partner who leads the DLT team at ISOLAS LLP, and who was recently recognised by Chambers and Partners as one of only 12 legal Blockchain experts, in the world, and the only one in Gibraltar, who spoke about his experience in this space and specifically about the applications process his firm has been undertaking since January 2018.
There can be no doubt that the development of this business is a powerful shot in the arm for Gibraltar’s economic interests as we count the weeks down to our departure from the EU. The combination of suggestions from Spain that border fluidity will not be impacted, nor that Spain will seek to exercise her veto in respect of the applicability of a UK/E.U deal to Gibraltar, makes us cautiously optimistic about the future.
Finally, and as this item went to press, the British Government has also confirmed its commitment that “The UK will guarantee Gibraltar financial services firms’ access to UK markets as now until 2020. Ahead of this, the UK Government will work closely with the Government of Gibraltar to design a replacement framework to endure beyond 2020 similarly based on shared, high standards of regulation, and enforcement of this regulation, and underpinned by modern arrangements for information-sharing, transparency and regulatory co-operation… The UK has provided assurance that gambling operators based in Gibraltar will continue to access the UK market after we leave the EU in the same way they do now – and we are working towards agreement of a MOU which will enable closer working and collaboration between gambling regulators in Gibraltar and the UK.”
Despite the challenges we can fully expect to face during these tumultuous times, there is much that we can point to as evidence of a ‘softening’ of the context in which we approach Brexit and the cryptocurrency/DLT business will no doubt become one of the many and varied key drivers of economic growth in Gibraltar for years to come.
BY SELWYN FIGUERAS