The Government of Gibraltar has published the Financial Services (Distributed Ledger Technology Providers) Regulations 2017 together with a Bill that will, if it becomes law, amend the Financial Services (Investment and Fiduciary Services) Act in favour of DLT/blockchain IT. This makes Gibraltar the first jurisdiction to come up with a full set of regulations to govern the use of all forms of blockchain technology.

The publication of the Bill and regulations springs from 2014 when the Cryptocurrency Working Group, chaired by Paul Astengo of Gibraltar Finance, David Parody and Joey Garcia, began to work on the project and do research. There were three public consultations on the subject and Gibraltar is now proclaiming that "regulatory certainty" will emerge for the first time in this field in January next year, as promised earlier this year.

The legislation has been designed to regulate otherwise-unregulated firms that use DLT for the transmission or storage of value that belongs to others. Albert Isola MP, the minister for commerce, thanked the DLT Working Group on which Sian Jones, a frequent contributor to these pages, has been sitting. He thought that the law would "provide strong long-term economic opportunity across many key areas of our economy."

Samantha Barrass, the CEO of the Gibraltar Financial Services Commission, thinks that the initiative places Gibraltar at the forefront of blockchain regulation.

The local law firm of Ellul & Co states that the new law provides for the regulation of any person or company carrying on by way of business, in or from Gibraltar, the use of distributed ledger technology for storing or transmitting value belonging to others. It also says that this will allow a multitude of businesses to be regulated if they conduct their operations from Gibraltar. These include the following.

• Centralised VC scheme administrators (e.g. loyalty points, in-game currency).
• Custodian VC wallet providers.
• Non-custodian VC wallet service providers.
• Clearing and settlement systems.
• Trading platforms.
• Virtual currency exchanges (between fiat & VC, and VC-to-VC).
• Peer-to-peer VC exchange platform operators.
• Holding, as a business, VC for others.
• Remittance service providers.
• B2B payment network operators.
• Payment service providers.
• Escrow service providers.
• Custodian VC wallet providers.
• Issuers of devices containing pre-loaded VC.
• Issuers of unregulated securities.
• Peer-to-peer gaming platform operators.
• Peer-to-peer insurance platforms.

The law will require DLT firms to: conduct their business with honesty and integrity; pay due regard to the interests and needs of each and all customers and communicate with them in a way that is fair, clear and not misleading; maintain adequate financial and non-financial resources; manage and control their businesses effectively, weighing up risks to both themselves and to customers; protect customers' assets and money systematically; have effective corporate governance arrangements; maintain all their systems and security access protocols to high standards; evolve systems to deal with the risk that financial criminals might strike; and be resilient and have contingency arrangements for the orderly and solvent winding-down of their businesses if needs be.