Former EU Commissioner John Dalli, who was recently appointed adviser to an Indian blockchain company, has warned the public of the perils of investing in cryptocurrencies, arguing they are way too speculative.
“I have never got involved in cryptocurrencies because I still consider them as way too risky, based solely on marketing with nothing basilar underpinning them,” Dalli told the press following a recent meeting with MEPs. “Take Bitcoin – it’s a complete absurdity. I used to receive four or five telephone calls a day from people encouraging me to invest in Bitcoin, a clear attempt to increase demand so as to increase the price. That’s the only reason the price of Bitcoin shot up the way it did, and in fact it slumped down significantly since that peak. I never invested in stock exchanges, but at least there you know that your investments are linked to companies’ profit margins.”
“From what I can gather though, cryptocurrencies are only going to gain ground so we must all keep our eyes open for any future developments.”
Dalli was recently appointed adviser of QuickX – a new Indian blockchain start-up which intends to simplify and speed up blockchain transactions. His appointment raised eyebrows locally when he was quoted as saying that blockchain allow people to conduct business secretly.
However, the former Finance Minister insisted he was referring to how blockchain allows citizens to transfer their data directly to each other, bypassing any centralised data capturing system.
“The Indian company [QuickX] called me up because I was the person who created the financial services industry in Malta,” Dalli said. “I spent a week immersing myself in blockchain and, although I’m no expert on it, I now consider it a really important technology that will prompt the democratisation of the digital infrastructure. Take data controversies like the recent Cambridge Analytica scandal – it was only possible in the first place because all our data filters into a single server, and this cannot happen in a distributed database system. This isn’t about secrecy but about privacy.”
“I hope the Maltese government embraces this technology in the same way I embraced the financial services industry.”
In the coming weeks, Malta is expected to pass three laws intended to attract blockchain-based companies to the island by setting up an authority which will regulate them and therefore grant them legal certainty.
Despite the caution attributed to the industry by several nations, Prime Minister Joseph Muscat has confidently claimed the move could transform Malta into a Silicon Valley of the Mediterranean.