The Distributed Ledger Technology Regulatory Framework (DLTRF)
The Distributed Ledger Technology (DLT) Regulatory Framework in Gibraltar, launched in January 2018, is one of the first pieces of legislation worldwide that specifically caters to DLT. It aims to establish an efficient and secure regulatory environment for companies utilizing DLT for value transmission or storage on behalf of others.
The framework is designed to position Gibraltar as a jurisdiction that encourages innovation while simultaneously upholding regulatory and strategic objectives. It acknowledges the need for quick and effective interaction between regulators and businesses in this rapidly evolving sector.
The Gibraltar Financial Services Commission (GFSC) is responsible for issuing licenses based on the ten core principles outlined in the DLT Regulations. These principles are found in detail on the GFSC's website by following this link https://bit.ly/45jOq8O.
The GFSC adopts a flexible and adaptive approach when dealing with novel business activities, products, and models. They believe that regulatory outcomes are best achieved through the application of principles rather than rigid rules. Given the rapidly changing nature of technology, relying on inflexible regulations can lead to outdated and inadequate guidelines for businesses.
Gibraltar also ensures that authorized DLT Providers comply with appropriate anti-money laundering (AML) requirements. These requirements align with, and often surpass, the proposed changes to the European Union's Fourth Anti-Money Laundering Directive, demonstrating Gibraltar's commitment to maintaining high standards in combating money laundering activities.