After Gibraltar Becomes First In The World To Regulate Blockchain, This Is How Malta Plans On Standing Out
Just like Bitcoin’s incredible flux in value, Malta’s infatuation and relation with cryptocurrencies has developed rapidly in a relatively short period of time.
Between the government, financial regulators, banks, and even local companies all sharing their opinion on the new blockchain technology, here’s some of the key developments that could determine the future of virtual currencies in Malta.
1. Prime Minister Joseph Muscat wants Malta to be a “trailblazer” in blockchain technology
Malta’s cabinet had approved a national blockchain strategy back in April, when Joseph Muscat had said that “Malta could be a trailblazer in this sphere.” “We need to be a frontline country when it comes to this innovation; we cannot wait for the regulators to reach their conclusions and then have to copy what other countries are already doing,” he said.
2. The Maltese government wants to establish a regulatory body for DLTs
MP Silvio Schembri, who is the Parliamentary Secretary for Financial Services and Digital economy, is spearheading the government’s “blockchain revolution”.
At a recent blockchain conference addressing over 350 delegates interested in the technology, he said that the Maltese government is now actively looking at establishing a regulatory body for Distributed Ledger Technology (DLTs), while also trying to build a strong ecosystem for DLT.
When these plans were announced, Malta was set to be the first country in the work with a regulatory body of this kind. However, Gibraltar has since beaten the country to it.
3. This should happen in the first few months of 2018
A spokesperson for Parliamentary Secretary Silvio Schembri within the Office of the Prime Minister told Lovin Malta that “the government is working to establish a new regulator for blockchain technology that will be in charge of regulating new business and services related to blockchain technology. The purpose of this regulator will be to back business in this sector with a legal framework that regulates and gives trust to the business operations in this sector, whilst at the same time ensuring that consumers purchasing a service or investing in areas governed by this technology are safeguarded as is the case with other Financial Sectors.”
“It is envisaged that the new regulator will be in place by the end of the first quarter of next year,” he said.
“There will be a consultation process open for all interested stakeholders in the run up to the new act establishing the new DLT regulator. This work is being done after the government has for several months consulted with various local and international stakeholders. The regulator will be innovative and give a new and unique dimension to blockchain technology,” he said.
4. Maltese-owned blockchain company Ledger Projects has already launched a notarial system
The new company is on the forefront of the technology, and is made up of industry experts and academics who believe that the “distributed ledger technology will disrupt the way transactions and agreements are executed.”
They’ve recently launched LP 01, Malta’s first DLT application that facilitates notarial work using DLT. It can handle property transfers and upload contracts, disrupting the way real estate can work in Malta.
It also offers a business inheritance tool for authorities, who can access and see real-time information on property sales all over the island.
5. There are multiple companies in Malta that accept Bitcoin payments
More local companies are accepting bitcoin as payment, and with companies like Keepmeposted accepting payments in Bitcoin and companies like Blonde and Giant even offering portions of their employees salaries in bitcoin, we could begin to see the technology become more and more common.
6. There have been multiple Maltese conferences on blockchain technology
From the Blockchain & Bitcoin Conference to the EY’s Annual Malta Attractiveness Event, more and more international organisations are seeing Malta as the right place to discuss the technology, with a wide range of ever expanding speakers invited to each conference. Whether they are coming due to the government’s welcoming rhetoric, the country’s financial regulations, or for the sun and the beach, is yet to be confirmed.
7. BOV is already banning access to cryptocurrencies
Bank Of Valletta has already banned its clients from using their accounts to issue SWIFT payments on cryptocurrency platforms, including the popular Coinbase. They follow other banks like BNF in banning payments related to cryptocurrencies, however Silvio Schembri has said he believes this is just a “short-term” move until regulations come into play.
8. The MFSA has issued guidelines on cryptocurrency use
The Malta Financial Services Authority, the single financial regulator for Malta – has actually issued their own guidelines for anyone looking to use virtual currencies. While they do not advise people to invest in virtual currencies at this early stage, they do offer one of the first real financial regulatory bodies’ view on cryptocurrencies. They warn of it’s unregulated model, the instability in value, and the possibility of having your virtual currency stolen from you, and advise in becoming fully informed before you invest.
From the government’s end, the spokesperson said that “the government does not interfere with individual banks’ operational policies. However, [since the guidelines were released], MFSA has issued a consultation document on regulating cryptocurrencies, exchanges and ICOs. The government is currently consulting with MFSA who is actively working on the drafting of new regulations in this area. We believe that the banks will reconsider their position once new regulation is in place. We believe that the local financial institutions are seriously looking into how to engage in the sector and change to benefit from the opportunities that exist with blockchain technology and cryptocurrencies.”
9. The government is working with stakeholders to craft the regulations
Silvio Schembri said that the MFSA issued a discussion paper on virtual currencies and the industry has until the beginning of the new year to provide feedback about how it feels that the sector should be regulated. ‘The discussion paper will lead to a policy framework that supports virtual currencies and related technologies while ensuring effective protection for investors, financial markets and stability’, Silvio Schembri said.
During the conference, Silvio Schembri also said that the Malta Gaming Authority has issued a call for interested parties to register and provide details on distributed ledger technology (DLT) and cryptocurrencies projects, all this with the aim of increasing efficiency, managing risks better, creating opportunities and improving people’s lives.
10. There are functioning Bitcoin ATMs around Malta
Bitcoin ATMs were first installed in Malta this year, but ran into a bit of trouble after installation, with reports of transaction errors leading to customers losing all their money in the account.
However, more companies are opening up Bitcoin ATMs in places like The Point in Sliema and Quicklets outlets where you can easily transfer your cash into Bitcoin. Besides the ATMs you can usually find a leaflet explaining how the blockchain technology works.
11. Malta is wary of over-regulation by the EU
EU legislators and member states have agreed that stricter rules are needed on blockchain exchange platforms to prevent money laundering and terrorism funding, however, some countries like Britain, Malta, Cyprus, Luxembourg and Ireland have attempted to stall these talks, saying fearing a negative impact on the local economy if increased regulations were to be put in place across the Eurozone.
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