On the issue of cryptocurrencies, no one agrees. Some point to a regulation that puts blockchain-based models at the center of the system. Others go to the other side of the table and deny the greatest regarding the financial blockchain. Meanwhile, the 6.8 km² of Gibraltar want to become the epicenter of cryptocurrencies with a movement that could well be a masterful move. It could also be a time bomb for the British enclave in the Mediterranean.
In this way, and for a few months, Gibraltar has taken another step towards becoming the kings of crypto. All without the approval of the FCA – British financial regulator – which, despite not having jurisprudence in this matter in the southern European region, points to the danger to which the region is exposed.
Valereum, a crypto exchange technology company, launched an offer to buy 80% of the shareholding of the Gibraltar Stock Exchange. Working in a similar way to the purchase of companies, the acquisition of a majority part of the parquet in the region is a step that goes much further than a simple transaction . Working as a butterfly effect, the moment Valereum takes office – and nothing seems to indicate that the regulators will back off this operation – there will be a before and after in total of the stock markets.
The technology company, based in Gibraltar and founded by Richard Poulden, focuses its activity on the exchange of legal tender coins for cryptocurrencies: Bitcoin, Dogecoin, Cardano, Ethereum and Tether. Of course, the reverse is also true. The objective of Valereum at the time of the acquisition will be to transfer its activity to the Gibraltar Stock Exchange . It will be the first stock market in the world to accept cryptocurrencies for trading on regulated equity markets.
Will it have a snowball effect for the rest of the markets? It is an assured fact, although it is not clear if it will be positive or negative. Regulators disagree on this point.
Fleeing the sanbenito of tax havens with a crypto bomb in his hands
Photo by Maxim Hopman on Unsplash Gibraltar has been one of the historic ones on the list of financial tax havens. In March 2021, Spain removed the region from its list after a tax agreement with the country. But even today, the independent region but under the protective wing of the United Kingdom, continues to flee from the bad name.
One third of Gibraltar's economy is centered on the financial sector. Almost 2,900 million euros managed by 82 employees
With the idea of removing the tax haven layer, for 3 years Gibraltar has been working on the Blockchain Rock proposal to be the financial center of the planet; at least as far as cryptos are concerned. A filtering system of blockchain companies to which the door of the region has been opened with a license permit to operate freely. Since its foundation, only 14 have obtained this permit . Which for Gibraltar is a guarantee to ensure the good work of its next move.
The purchase of Valereum could be the icing on a cake that has been baking since 2018. A cake that could explode at any time according to British regulators. Or it could also turn out very well and be the reference for the next few years for the rest of the markets.
One third of Gibraltar's economy is centered in the financial sector. Almost 2,900 million euros managed by 82 employees –the total number of civil servants that it has for this division– in a country of just 33,000 inhabitants. Although it is true that the Gibraltar Stock Exchange has confirmed that its decision is assured to fight any problem that arises , international regulators are not entirely clear about it, especially if cryptos go to enter to play in the league of international markets.
Albert Isola, Gibraltar's Minister of Digital, Financial and Public Services, pointed out in statements to The Guardian that the filtering and licensing system is a guarantee of good practice. One that tries to avoid the mistakes of Malta. The gateway to money laundering courtesy of very lax rules in the management of bitcoin companies. It is precisely the act of opening the door to regulated markets for digital – and anonymous – criminals that worries regulators.
A system sustained by 4 employees The region could even face major international sanctions in order to block the permeability of its decisions to the rest of the markets. From Valereum they point out that the processes implemented ensure the veracity of the operations and their legality . Some processes that, by the way, are managed with a team of just 4 employees: better technology than humans who can be perverted or make mistakes.
Along these lines, Gibraltar does not have the backing of either the United Kingdom, nor many international regulators. London gave the order just a few weeks ago to ban any Binance operation in the country. A decision that has hardly affected the Cayman Islands-based technology company precisely because of this same data. The British regulator said that crypto is not a valid investment system for its system; that must be protected against this new wave. The United States, Germany and Spain have also positioned themselves slightly against the new financial trends; Its first steps have come from the hand of regulating the advertisements that proclaim the activity of related companies.
But at the top is China, which being one of the main cryptocurrency mining markets has gone on to prohibit any activity of the same in its territory. On the other side, El Salvador, with a measure that is not clear if marketing plays in the league, approving Bitcoin as its second legal tender. With 70% of the population without access to a standard financial system , the idea of implanting bitcoin as the official currency seems like a populist decision for some sectors.
