The Gibraltar Stock Exchange is quietly preparing for a corporate takeover that could have global consequences.
Regulators are reviewing a proposal that would encourage blockchain firm Valereum to buy the Gibraltar Stock Exchange by 2022, according to The Guardian newspaper.
This means that the UK region could soon host the world’s first integrated exchange, where conventional bonds can be traded alongside major cryptocurrencies such as bitcoin and dogecoin.
Valereum focuses on providing technology to link major currencies, such as the pound and dollar, with crypto assets.
While countries such as China and the UK openly prohibit or oppose investing in crypto assets, Gibraltar is bucking the trend and has committed to officially regulating cryptocurrencies in an effort to protect the region as a future financial hub. .
The move comes as Gibraltar is struggling to shake off its reputation as a global tax haven.
Albert Isola, Gibraltar’s minister for digital, financial and public services, told The Guardian that although Gibraltar was a tax haven 20 years ago, it has now revised its tax policy and shared its information. The introduction of crypto regulation has the same effect: rooting out bad actors and providing security for investors.
“If you wanted to do bad things in crypto, you wouldn’t be in Gibraltar, because those companies are licensed and regulated, and they’re nowhere else in the world,” Isola said.
Gibraltar’s regulator has so far approved 14 cryptocurrency and blockchain companies for its licensing scheme, which caught the attention of former Sirius Minerals chairman Richard Poulden, who selected Gibraltar for the Valereum cryptocurrency exchange project.
Valereum, he said, is trying to enter the roughly $3.5 trillion cryptocurrency sector, nearly the combined value of all the companies listed on the London Stock Exchange.
Other countries will be watching closely. Neil Williams, deputy director of complex crimes at London-based Reeds Solicitors, said: “If it works, I would definitely think that other jurisdictions will try to follow suit,” he told the British outlet.
However, experts have warned that Gibraltar could face sanctions from countries like the United States if its regulators finally give the money launderers legal approval.
A month before Valereum announced its offering for GSX in October, the head of the U.S. Securities and Exchange Commission, Gary Gensler, stated that, as an asset class, cryptocurrencies are “more like the wild west…”. criminal funds leak into the general financial system.
But Gibraltar insists it has welcomed blockchain companies with wide eyes, having consulted its regulations for the sector for four years before introducing it in 2018.
“I don’t understand how there could be greater risk in Gibraltar, when today you can go to another European country and do the exact same business unsupervised, unlicensed and unregulated. So how can we be more open with managing it? Quite the opposite,” said Isola.