The Republic of Malta, the idyllic island in the middle of the Mediterranean known for its burgeoning tourism and financial services, has recently started to emerge as a primary leader in the blockchain industry. Notably, Malta’s parliament recently passed a series of momentous bills designed to shape the small nation’s developing blockchain-friendly regulatory environment. Blockchain in Malta is about to make Malta become “Blockchain Island” has already attracted some considerable attention in the cryptocurrency sphere, with Binance, the largest and most popular cryptocurrency exchange in the world, announcing a few months ago that they would be relocating their headquarters to Malta.
With the current uncertain regulatory environment surrounding cryptocurrencies in many countries including the United States, South Korea, and Japan, Malta looks to become the frontrunner in blockchain and cryptocurrency adoption.
Regulations and Excitement
A public consultation on the creation of The Malta Digital Innovation Authority was launched by the Maltesian government earlier this year with a focus on providing legal clarity and regulatory transparency for blockchain companies, ICOs, and cryptocurrency platforms.
Since then, leaders in the government such as the current prime minister Joseph Muscat and the Junior Minister for Financial Services, Silvio Schembri, have been publicly supportive and welcoming to blockchain technology and companies. Further, the recent passage of three bills by the Maltesian parliament focusing on building a friendly regulatory framework for the future development of blockchain technology and financial innovation has been met with excitement from both Malta and the broader cryptocurrency community.
One of the bills, the Digital Innovation Authority Act, officially launches the Malta Digital Innovation Authority whose responsibility it will be to oversee the regulation of virtual financial assets in Malta. The official regulation documentation offers some interesting insights into the role Malta’s government hopes that distributed ledger technology will play in the future development of their technological infrastructure such as applications for healthcare data privacy.
Migration of Blockchain Business
While Binance’s move to Malta may be the most noteworthy so far within the cryptocurrency realm, there have been numerous other exchanges and blockchain related businesses that have similarly made the official move to Malta or have publicly announced doing so.
Cryptocurrency exchanges OKEx and BitBay both recently moved their primary operations to Malta, along with blockchain-based equity fundraising platform Neufund and British blockchain platform Omnitude.
Not only did Binance make the permanent move to Malta, where they are set to employee over 200 full-time employees at their new headquarters, but they also recently announced that they had acquired a 5 percent stake in Founders Bank, which hopes to become the world’s first decentralized and community-owned bank. Founders Bank would conduct its offering through the aforementioned Neufund equity fundraising platform, but first would need an approved license from regulators in Malta as well as approval from the European Central Bank, since Malta is a member of the European Union.
Shaping the Future Blockchain Industry
Malta’s welcoming approach to fostering the development of blockchain technology and businesses will inevitably lead to further migration and emergence of blockchain businesses on the small Mediterranean island. The regulatory climate surrounding cryptocurrencies and blockchain technology worldwide has undoubtedly been indecisive up to this point, as a whole.
Many countries seem to be waiting for major regulatory moves from other countries before making any impactful decisions on internal regulatory environments. Malta’s quick and decisive implementation of technology-friendly regulations aimed at guiding their technology and financial sectors over the foreseeable future may end up serving as a model for similar adoption of regulatory frameworks around blockchain businesses and cryptocurrencies.
Hopefully, regulators outside of Malta begin to learn more about the emerging industry and understand how implementing strict regulations as a means to contain the technology will only lead to a new wave of innovation moving elsewhere.