Digital Finances

James Tipping discusses digital currencies

Finance Centre Director, James Tipping, recently issued the following advice in a series of bulletins (so we paraphrase!):

Digital Options, Digital Currencies and Trading in Carbon Credits

The Financial Services Commission has recently made representations to the Minister with responsibility for financial services, proposing that carrying on business in digital options (also known as binary options), digital currencies (such as Bitcoins) and offering products such as carbon credits, should be licensable activities under the Financial Services (Investment and Fiduciary Services) Act.

The Government is minded to accept the representations made by the FSC (and also recommended by me) because of the very high degree of reputational risk surrounding these particular activities eg the selling of carbon credits (via the telephone) to retail or even SMEs is fraught with risks of mis-selling a ‘product’ to people who do not understand what they are buying and may it difficult or impossible to re-sell at a transparent or fair price or even at all. A simple Google search and read-up on each of the above categories makes it clear where the reputational concerns rest.

By making each of these activities a regulated activity, it is the intention that intermediation in such products will be subject to significant regulatory restriction and a high degree of supervisory oversight when conducted in or from within Gibraltar.

If any person or organisation wishes to make representation (to the Finance Centre Department) then please feel free (as always) to do so at and as soon as possible before Thursday 20th February.

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