On Tuesday (June 26) members of the Maltese Parliament voted unanimously to approve three cryptocurrency and blockchain bills designed to move the country closer to its stated goal of becoming a “blockchain island.”
Parliament Secretary for Financial Services and Digital Economy and Innovation Silvio Schembri, who is leading the push to make Malta a global cryptocurrency hub, presented the three bills during the launch of the Malta Islamic Finance Association earlier this week.
“We believe that the emergence of cryptocurrencies is here to stay, and as a government, we are anticipating the changes that cryptocurrencies may bring about in our daily lives,” said Schembri
He added that the government’s aim is to create the right environment for Distributed Ledger Technology (DLT) to evolve and eventually sustain new economic segments such as Fintech.
He went on to add that authorities such as the Malta Financial Services Authority (MFSA) already take a proactive stance and have issued a public consultation to ensure investor protection and market integrity. He further noted that the MFSA is working on rules and regulations for cryptocurrencies and ICOs which will be issued soon.
The three bills: The Malta Digital Innovation Authority Bill; the Innovation Technological Arrangements and Services Bill; and the Virtual Asset Bill will regulate the use of blockchain technology and cryptocurrencies across the country and prioritize market regulation or registration.
The Guiding Principles section of the Malta Digital Innovation Authority Bill state that it is designed to “promote and develop the innovative technology sector in Malta by means of proper recognition and regulation of relevant innovative technology arrangements and related services.”
Negotiating the delicate balance between regulation and innovation, the Bill goes on to state that it will promote the cryptocurrency sector, “with respect of the importance of not hindering innovation” and that “recognition and regulation will be moderated by the pace of change,” and that it will put “standards in place for the protection of consumers and investors”.
The Virtual Financial Assets Act targets the financial transactions and sales within Malta’s cryptocurrency market. The Bill will regulate all initial coin offerings (ICOs) launched inMalta, along with any service-providers involved ICO related activities. The Act also provides an outline of regulations that will strictly apply to all cryptocurrency trades and exchanges.
The Innovative Technology Arrangements and Services Act provides various methods of recognition and registration which may apply to “innovative technology arrangements and innovative technology services” such as blockchain technology and cryptocurrency trading. This act will implement the registration process through the use of administrators and auditors.
The passage of these wide-ranging bills has further reinforced Malta’s reputation as cryptocurrency friendly jurisdiction and will likely increase the number of cryptocurrency companies setting up their headquarters there, as well as increasing the number of ICOs launched in the country.
Binance, the world’s largest cryptocurrency exchange by traded value, recently announced that it is setting up operations in Malta. The announcent was followed by similar ones from Poland’s largest cryptocurrency exchange BitBay and Hong Kong-based cryptocurrency exchange OKEx.
Several companies, including Bitfury Group and Omnitude, have also signed partnerships with Maltese companies and public agencies to develop and implement blockchain technology in varied areas.