Another win for the blockchain industry as Gibraltar, one of UK’s overseas colonies, prepares to launch regulations relating to Blockchain technology. This would make Gibraltar an attractive location for blockchain-based fintech startups. This comes weeks after the world-renowned credit card company, American Express, proposed their plan to use blockchain technology to cut transaction costs. This is another great milestone for the blockchain industry in its journey to revolutionize the fintech industry.
Gibraltar Financial Services Commission (GFSC) is the brainchild behind this latest development. The GFSC has published their guidelines regarding the new laws that are applicable to firms using blockchain technology.
The following were the comments of Nicky Gomez, the head of risk and innovation at GFSC.
“This is the first instance of a purpose-built legislative framework for businesses that use blockchain or distributed ledger technology.”
Blockchain is a new concept that rose to awareness after it was used in the development of the famous cryptocurrency, Bitcoin. By using blockchain technology, the Bitcoin network, in addition to the network of any other blockchain-based cryptocurrency, can process and verify transactions within minutes, without the need of any third-party verification. This effectively reduces the costs of transactions, as contemporary bank transactions would have to go through a number of middle men in order to complete a simple transaction. It also improves the speed of transactions. A strong blockchain-based network will be able to process thousands of transactions in seconds.
Bitcoin’s mempool did suffer from a network bottleneck in a the past few weeks due to spam attacks. The network was unable to process a large number of transactions which was seen as a weakness of the new technology.
Gibraltar expects that with the latest legislation coming into effect on January 1st, it will become one of the hottest locations for the latest fintech companies. Gibraltar is well known for its gambling and insurance services. The region has a liberal tax regime, which makes it an attractive location for businesses.
Although Gibraltar has a population of only 30,000 people, it has around 15,000 companies operating out of it. According to the latest guidelines, the blockchain fintech companies will have to treat their customers fairly and have good IT infrastructures in order to support their customers in the best way possible. Gibraltar is leading the way in the blockchain industry and hopefully other countries will follow suite and regulate the cryptocurrency market.