A few days after cryptocurrency exchange giant Binance confirmed it is moving to Malta, Prime Minister Joseph Muscat stuck his neck out completely in favour of cryptocurrencies, predicting they are the inevitable future of money.
“The concept of cryptocurrencies excites me as it strikes at the heart of a key philosophical element that economy students are taught at the beginning of their course,” Muscat – an economics university graduate – said in his political speech today. “Have any of you ever thought about what gives paper money its value when it’s ultimately just pieces of paper? The reason they have value is because society attributes value to them. Now some people, who in my opinion are geniuses, are arguing that value can similarly be attributed to virtual currencies.”
Binance founder Zhao Changpeng
“Millions of people already attribute value to virtual currencies, which has created an entirely new market. The concept sounds confusing right now, but I have no doubt that it will form the base of a new economy in the future. Just as we attribute value to pieces of paper, so too will future generations attribute value to electronic storage systems.”
Joseph Muscat starts talking about blockchain and cryptocurrencies at around 33:00
Last month, the government laid out its plans to become the first country in the world to fully regulate companies which operate on blockchain – the technology that underpins cryptocurrencies. One of the three bills in the pipeline is a Virtual Currency Bill that will provide a legal framework for initial coin offerings and regulate crypto wallet providers, cryptocurrency exchanges and asset managers.
In his speech today, Muscat said this new sector could ultimately prove more important to Malta than iGaming – particularly as pressure for tax harmonisation is growing in the EU.
“Financial services and iGaming companies invest in Malta because of our regulatory basis and our HR system, but also because of our imputation system of taxation,” he said. “These blockchain operating companies don’t care about our taxation system but are coming to Malta, because of our innovative regulatory structure that will certainly be the first, and I think also the best, in the world.”