The regulatory principle was created by the regulator and the Market Integrity Working Group, consisting of government officials and leaders in Gibraltar's blockchain and digital currency space.
The program helps demonstrate the advantage of using blockchain technology by making it easier for residents and location organizations to use public services.
The Gibraltar Financial Services Commission has overhauled seven of its nine guiding principles, which were first set out in 2018, on which the regulatory framework is based.
According to a statement from the regulator, the guidance has been updated to better reflect the “natural evolution of the defined regulatory principles”, taking account of changes in the industry since the guidance was first drawn up.
The new guidance introduces definitions for virtual assets and virtual asset instruments and guidelines for distinguishing between the two, the latter of which is often considered to be higher risk than pure virtual assets, according to the GFSC statement.
Under the guidance, token issuers will be prevented from holding internal reserves of their tokens towards complying with capital requirements, as well as introducing new measures for dealing with the risks posed by stablecoins.
The guidance also takes account of the latest recommendations from the Financial Action Task Force on frameworks for regulating virtual asset services firms and virtual assets.
The move follows on from criticisms of Gibraltar, notably from the European Union, over its efforts to date in tackling money laundering through its regulation of the sector.
Some 13 DLT service providers are currently licensed in Gibraltar, including Bisto, Xapo and eToro.
The new guidance has been updated to reflect more comprehensive compliance requirements across the sector, with Gibraltar keen to attract more DLT service providers to choose their jurisdiction for licensing and regulating their business.
The move comes at a time of increasing regulation for blockchain and digital currency businesses worldwide, as governments and regulators strive to make their jurisdictions more appealing for digital currency services and providers." title="Gibraltar publishes updated guidance for DLT service providers" />
The Gibraltar Financial Services Commission has overhauled seven of its nine guiding principles on which the regulatory framework is based.
The Gibraltar financial services regulator has warned against four trading platforms that offer digital currency trading and falsely claim to be regulated.
Firms were welcome to issue tokens under license of Gibraltar, subject to rules which consider all token issues to be a form of security issue.
Blockchain firms operating in the UK-owned territory are going to have to comply with new regulations to continue to operate.
Gibraltar’s financial regulator has licensed B21 crypto trading app, the first license of its kind in the country.
The award of the license follows a grueling 15-month process, during which Quedex has been liaising closely with regulators in Gibraltar.