The House of Block recently hosted high-profile members of Gibraltar’s government and private sector for an invitation-only dinner to showcase its status as a dynamic financial services ecosystem.
Gibraltar’s Minister of Justice, Commerce and Industry, Nigel Feetham KC MP, was on hand to deliver a keynote, in addition to staff from the Gibraltar Funds & Investments Association. Guests included lawyers, moneymen, asset managers, and founders from Web3 companies.
Though pitched as a general networking event focusing on Gibraltar’s financial services sector, it’s impossible to miss the bigger picture: the role Gibraltar will play (and is playing) in the exploding digital asset and Web3 revolution currently underway.
No stranger to the nascent industry, Gibraltar makes for an interesting candidate to serve as a Web3 hub. It’s got an existing reputation as one of the more innovative corners of Britain, and for good reason. As a British Overseas Territory with devolved powers, it has a unique tax regime which makes it a far more competitive base of operations than the mainland: corporation tax, for example, is 10% in Gibraltar—nearly half the 19% rate on offer in the U.K.
This is a large part of why Gibraltar has become the home of an earlier emerging industry: online gambling. Gibraltar is the corporate home of most of the leading gambling companies in Europe, including 80% of those based in the U.K. The sector provides 25% of the island’s jobs and makes up about 20% of its GDP.
Clearly, this embrace of the gaming industry has been lucrative for Gibraltar, so it makes sense that the territory would turn its eyes toward the Web3 revolution.
It also relates to another reason Gibraltar might have a unique advantage in this respect: it’s more than familiar with the challenges of being an early mover in an industry with real compliance issues.
Gibraltar has historically been considered a tax haven, to put it mildly. In 2022, Gibraltar was added to the so-called ‘grey list’ of the Financial Action Task Force (FATF), an intergovernmental body that addresses anti-money laundering and terrorist financing. The grey list, officially known as ‘Jurisdictions under Increased Monitoring’, is a record of countries with weak anti-money laundering and terrorist financing regimes, but which are actively working with the FATF to strengthen them. Countries on the grey list are subject to heightened monitoring by FATF and are typically considered ‘high-risk’ by global financial institutions.
Gibraltar’s gambling industry was singled out by the FATF as a key factor in its addition to the grey list. At the time, FATF said that the local authorities were not “applying sufficient fines for anti-money laundering failings.”
“This is important as the gambling sector in Gibraltar is large and is aimed at foreign jurisdictions,” it said.
The language will be common to anyone who has heard regulators and lawmakers umm-and-ahh over compliance issues in the digital asset industry.
Fortunately, Gibraltar may be off to a better start with Web3 than it was with gambling. The territory was an early mover in establishing legal frameworks for the digital asset industry, with the Gibraltar Financial Services Commission passing one of the first DLT regulatory frameworks in 2018. The framework set rules around transparency, reserve assets, and consumer protection. This included a licensing regime for digital asset service providers, which directly referenced FATF standards.
This led to an early surge in digital asset-related activity on the island. One blockchain firm, Valereum, even received regulatory approval to outright buy the Gibraltar Stock Exchange, though little appears to have come of the purchase since it closed sometime in 2023.
Being so quick to bring the industry within its legal ringfence looks even smarter in light of Gibraltar’s successful reputational overhaul, which saw it removed from the FATF grey list in 2024. As Gibraltar’s then-minister for digital, financial services, and public utilities said after the passage of the DLT legal framework:
“If you wanted to do naughty things in crypto, you wouldn’t be in Gibraltar, because the firms are licensed and regulated, and they aren’t anywhere else in the world.”
That was in 2021, roughly the same time that the SEC’s Gary Gensler was lamenting that the digital asset industry was “more like the wild west… rife with fraud, scams, and abuse in certain applications.”
We’re now in 2025, when the United States not only has its own dedicated legal regime addressing digital assets but the President himself is issuing coins. Gibraltar appears to have made the right bet.
Watch: How Do You Define Web3?
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Source: https://coingeek.com/is-web3-the-next-phase-in-gibraltar-reputational-overhaul/