Welcome to the summer/autumn 2018 IFC Economic Report. This is the 10th issue in the series, a technology friendly, innovation edition that looks at how offshore finance centres can future-proof their services – or, if more ambitious, stand at the helm of change.
We have entered the fourth industrial revolution, a time when emerging technological breakthroughs in robotics, artificial intelligence and quantum computing are transforming how we live, including how we bank. In our cover story, 'Blockchain: Jousting for the Competitive Advantage', we pay special attention to initial coin offerings (ICOs or unregulated funding vehicles for blockchain products) and blockchain (an openly available ledger at the heart of cryptocurrencies). We evaluate the uses and prospective regulation of this technology and identify the jurisdictions currently innovating in the area.
‘Future-proofing’ financial services not only involves keeping pace with technological change, but also requires global players to adapt to a changing cultural mind-set. Ethical investing and sustainable finance projects have gathered momentum in recent years. The IFC Economic Report examines this phenomenon and identifies some of the green products currently being made available to investors.
Also, in this edition, we look at the issues preying on the minds of our offshore industry partners today. In particular, we examine the UK's relationship with the Crown Dependencies and the British Overseas Territories. Will public registers of beneficial ownership be enforced across these jurisdictions by 2023?
The ramping up of compliance and transparency standards is a continuing theme and small, island IFCs most certainly seem to get the full brunt of this ongoing pressure – 'comply or be sanctioned'. Allegations of big-state hypocrisy are common and perhaps rightly so. In our regular 'Big Debate' feature we recruit a spectrum of opinion, including stances from the EU Commission, the Tax Justice Network and senior spokespersons representing the offshore finance industry to zero in on one area where the credibility of IFCs seems to have been undermined most, and that is in the use of tax haven blacklists.
Alongside the latest key developments, we also look at the performance of current regulation and policy. We examine the impact of Mifid II, US tax reform and BEPs and cast an eye on digital tax and tax harmonisation across the EU.
We would like to thank all of our contributors for their excellent work in making this edition possible and we hope that you, the reader, draw benefit from our writers' insights and expertise.