GIBRALTAR Law and Practice Contributed by: Aaron Payas, Jeremy Requena, Jerome Compson and Reece Atkinson, Hassans
6.2 Stablecoins 6.2.1 Fiat Currency and Algorithmic Stablecoins In accordance with the FSA, a virtual asset is defined as: “a digital representation of value that can be digi- tally traded, or transferred, and can be used for pay- ment or investment purposes, but does not include digital representations of fiat currencies” Alternatively, for fiat currency, whilst the definition of “money” has been removed from the legislation in Gibraltar, it has traditionally been interpreted as “tra- ditional money” that is issued by central banks. Subsequently, a distinction can be made. Whilst “algorithmic” stablecoins are deemed to be virtual assets, which are not solely issued by central banks, fiat currencies are not deemed to be virtual assets and are solely issued by central banks. 6.2.2 Stablecoin Regulation Fiat-backed stablecoins are regulated in Gibraltar. However, there is no single bespoke framework for such offering. Instead, fiat-backed stablecoins are retrofitted into the existing payment regulatory frame- work and the DLT regulatory framework, and conse- quently, depending upon the specific context of the fiat-backed stablecoin, it may fall within scope of the regulated activities: e-money, DLT, or financial instru- There are no Gibraltar-specific requirements for back- ing assets for fiat-backed stablecoins. Instead, the GFSC requires such activity to be conducted in line with the ten DLT guiding principles: • Honesty and Integrity; • Customer Care; • Resources; • Risk Management; • Protection of Client Assets; • Corporate Governance; • Systems and Securities Access; ments via derivatives. 6.2.3 Backing Assets
6.2.4 Special Considerations Gibraltar does not currently have a specific regula- tory regime for systemically important stablecoins. The existing DLT Framework and financial services legislation do not distinguish between stablecoins on the basis of systemic risk classification. In practice, all stablecoin issuers operating in or from Gibraltar are subject to the same regulatory requirements as other DLT Providers or relevant financial businesses, as applicable. Where a stablecoin’s characteristics bring it within the definition of electronic money under the FSA, the e-money regulatory framework will apply. The GFSC monitors international developments in this area, including the approach taken under the EU’s Markets in Crypto-Assets Regulation, and may intro- duce additional requirements for significant or widely adopted stablecoins as the market evolves. 7. Tokenisation and Real-World Assets 7.1 Treatment In Gibraltar, tokenised assets and real-world assets that fall within the definition of “financial instruments” under the FSA are regulated in the same way as their non-blockchain equivalents. This means that existing requirements relating to securities, prospectuses, and investment services apply regardless of whether the asset is represented on a distributed ledger. In addi- tion, where the tokenisation process involves the use of DLT to store or transmit value belonging to others, the DLT Framework will apply and the relevant firm will need to be authorised by the GFSC as a DLT Pro- vider. Similarly, where tokenisation activities fall within the scope of the RFB Regulations, POCA Registration obligations will apply. This dual-perimeter approach ensures that tokenised assets receive regulatory treat- ment equivalent to their traditional counterparts, while also capturing the technology-specific risks associ- ated with DLT.
• Financial Crime; • Resilience; and • Market Integrity.
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