Malta, a seemingly unassuming country in Europe, is putting itself on the global radar with its new nickname as the “Blockchain Island“. Blockchain and its disruptive nature is a hot topic on every tech-enthusiast’s lips and Malta has been quick to position itself front and centre on the crypto map at this pivotal moment in time.
How did it come to be that Malta is becoming a prime location for international businesses within the crypto-sector?
In this article we’re going to explain the global issues that are pushing crypto start-ups and businesses to our golden shores, the unique DLT regulation that has been proposed making Malta a world leader in blockchain, ICOs and cryptocurrencies and the status of the three proposed bills.
Malta announces DLT regulation
Quick to notice the potential that distributed ledger technologies have to offer and the need for a positive form of regulation in a previously unregulated area, Junior Minister for Financial Services, Digital Economy and Innovation within the Office of the Prime Minister Silvio Schembri was the first to make the ambitious announcement that Malta would set a world first with a framework for DLT (Distributed Ledger Technology) regulation.
Prime Minister Joseph Muscat welcomed them in with open arms and what followed was a number of crypto companies and startups following suit.
Welcome to #Malta 🇲🇹 @binance. We aim to be the global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world class fintech companies -JM @SilvioSchembri https://t.co/3qtAQjOpuQ
— Joseph Muscat (@JosephMuscat_JM) March 23, 2018
With regulatory pressure coming from countries in Asia and issues with banks in countries like the US, companies in the crypto-sector are finding Malta to be very progressive and open to businesses in crypto and fintech.
Founder of Binance, Zhao Changpeng said that “Malta is very progressive when it comes to crypto and fintech”.
Companies like Binance will offer the service of fiat-to-crypto exchange in Malta, working with local banks to provide the service.
Aside from the progressive one of a kind framework Malta has to offer on an international level, our 300 days of sun and sea aren’t too bad either.
Three new bills
There are three new bills which were presented in Parliament to give more legal certainty to banks, companies and employees within the digital revolution sphere:
- The Malta Digital Innovation Authority Bill
This bill will bring in a new authority into the picture, known as the Malta Digital Innovation Authority (MDIA). The MDIA will focus on innovative technology arrangements and will begin focusing on regulations of DLT and Smart Contracts. The new government authority promote government policies, education on technology arrangements and foster the advancements of innovative technology.
- Technology Services and Arrangements Bill
The Technology Services and Arrangements Bill will set out the regulatory regime requested by MDIA to operate, including the registration of service providers including administrators, auditors and certification of technology arrangements.
- The Virtual Financial Assets Bill
This Virtual Financial Assets Bill will establish the regulatory regime for the MFSA to regulate the Virtual Financial Assets Markets. This will ensure that the three main principles of financial regulation are adhered to and will be a market that protects the investor and provides market integrity and financial soundness.
How will these bills be implemented?
The three bills are now into their second reading in Parliament meaning that Malta is few steps away from becoming the first world jurisdiction to regulate DLT.
After the discussion stage, any necessary changes will be made and soon after fully enacted, a global milestone that will push ICO and cryptocurrency growth while not stifling technological innovation.
What do you think of Malta positioning itself as the centre for the crypto-sector? Tell us in the comments below.