Less than a week since it started licensing blockchain businesses, Gibraltar has received bad news from the United Kingdom. A leading British bank has refused to process orders from crypto firms based in the overseas territory. Gibraltan banks are now on the lookout for another UK banking partner.
Slots are Fine, Coins – Nah
The negative reaction to Gibraltar’s decision to seduce the crypto sector came from the Royal Bank of Scotland. Its partner, the Gibraltar International Bank, has received notification that RBS will no longer process transactions connected to firms dealing with cryptocurrencies. The Scottish bank has effectively closed the clearing system for companies licensed under the new Digital Ledger Technology Regulatory Framework implemented by Gibraltar.
The new DTL legislation went into effect on January 1, after Gibraltar Parliament approved a bill last month designed to update its financial regulations. Along with online betting and gaming, financial services provide a great deal of Gibraltar’s domestic product and income. Local authorities have decided to tap into the profits of the new cryptocurrency segment, rather than ban or ignore it. The territory has also become the first in European jurisdiction to regulate ICOs through its Financial Services Commission (GFSC).
Following RBS’s warning, the Chief Operating Officer of GIB Derek Sene announced that his bank would look for another UK correspondent to establish a mechanism for processing crypto related transfers. He said that making strategic decisions such as this was standard practice. The Gibraltar International Bank is not dealing with cryptocurrencies but has started opening accounts for companies using blockchain technology in October last year. Quoted by local media, Sene stated that GIB would continue operating within the DLT industry.
A Sign from Dante’s Inferno
RBS is yet to comment officially on its decision to reject crypto related transactions from Gibraltar but its management’s attitude towards digital currencies is well known. “Put up the sign from Dante’s Inferno – ‘Abandon hope all ye who enter here” – that’s the only thing authorities could do about cryptocurrencies, according to the bank’s chairman Sir Howard Davies…