It’s been 14 months since Malta passed legislation aimed at attracting the blockchain sector to the island but not a single crypto exchange or company which utilises financial blockchain software has been licensed yet.
A total of 19 legal and financial services firms have been approved as Virtual Financial Assets (VFA) agents, to act as intermediaries between blockchain companies and the authorities. However, demand for their services doesn’t seem to be that high.
In total, the VFA agents have only submitted 34 letters of intent and eight formal applications to the Malta Financial Services Authority on behalf of their crypto clients. None of these applications have been approved as of yet, meaning the popularised moniker ‘Blockchain Island’ might soon need to be seriously rebranded.
This data was submitted by the MFSA to Lovin Malta on 21st January 2020.
Malta passed three laws regulating the blockchain space back in November 2018, a move intended to position the island as a pioneering nation with regards emerging technologies. What followed was a flurry of international interest, with crypto giant Binance moving its offices to Malta and the likes of Steve Wozniak, John McAfee and Ben Goertzel all displaying interest.
However, many players have baulked at the regulatory and financial requirements of obtaining a Maltese license and have since turned their eyes elsewhere.
Leon Siegmund, a board member of the Malta Blockchain Association, told crypto news website Decrypt that the hype around ‘Blockchain Island’ is truly over.
“Internationally speaking, [Malta] is not a hotspot anymore. Germany now allows their banks to hold custody on bitcoin wallets. That means this little time window for a small country to come up with an attractive framework is over,” he said.
Siegmund also referred to Germany’s recent law which requires crypto companies to hold a German license in order to provide services to German nationals. This move, especially if replicated in other countries, could well render acquiring a Maltese license far less attractive.
“It’s too expensive; it doesn’t provide any value. As long as it’s not passportable, it’s a small market, so it’s not really useful,” he said.