On July 4, the Maltese parliament passed three bills to set a regulatory framework and drive innovation in blockchain-like technologies.
“We are doing [things] differently than other jurisdictions and are not merely focusing on just ICOs and financial assets. What we are doing is creating a legal environment for DLTs and blockchains, which would obviously include, as well, ICOs, crypto assets, regulation of exchanges, brokers, money makers,” said Silvio Schembri, Junior Minister for Financial Services, Digital Economy & Innovation.
The government of Malta is passing laws ensuring exchange owners and users a level of certainty about the future. The rules will cover how brokerages, exchanges, asset managers and traders operate, making them among the broadest set of regulations for the industry. “The proposed framework will offer legal certainty in a space that is currently unregulated,” the government said in a consultation paper. A national tax policy permits international companies on the island to pay a rate of as little as 5 percent as well.
“Malta has accepted the fact that blockchain technology and cryptocurrencies are inevitably going to become more popular,” said Joseph Borg, head of blockchain advisory at the WH Partners legal firm. “By taking this step, Malta is destined to become a hub for innovative technology startups and established blockchain-based businesses to thrive, while creating economic growth on the island.”
Recently, a few cryptocurrency exchanges, including Binance, OKEx, and BitBay, set up operations on the island because of its progressive policymaking towards the field.
Much of the country’s overly positive sentiment towards the industry is represented by its Prime Minister. Joseph Muscat has been quite outspoken, stating that cryptocurrencies are the “inevitable future of money.” In a celebratory tweet following the recent legislative progress, Muscat has stated that the country aims to become a “global hub for market leaders in this new sector.”
The arrival of cryptocurrency companies brings jobs and new opportunities. Binance, the world’s largest crypto exchange by traded value, said it will “eventually hire up to 200 people” in Malta to carry out its relocation from Hong Kong. In May, the government announced a partnership with a British blockchain platform, Omnitude, to improve the island’s public transportation network. The company, Learning Machine Technologies, has launched a pilot program to allow Maltese higher-education and vocational students to access and retrieve educational transcripts and records using blockchain technology.
“Even the bravest projects, tech-related or not, require the right environment to grow bigger and stronger and we are determined to offer that environment in Malta,” added Schembri.
One more quote from Schembri to elucidate the nation’s plan:
“The idea was to get the public to become aware and understand that it may be beneficial to society as a whole to recognize that a technology arrangement could indeed operate better and more safely if it had a legal personality allowing it to take into consideration all the rights and remedies in case of financial or even ‘physical’ harm, to all those around it.”