Malta is leading the way in blockchain regulation, Silvio Schembri told parliament on Wednesday, noting that 16 companies have already been licensed, with 17 additional applications underway.

While closing the debate on the financial estimates for his ministry, the Economy Minister rejected claims made earlier by shadow minister Jerome Caruana Cilia that Malta’s blockchain sector had faltered.

The idea to turn Malta into a blockchain island was first proposed in February 2017 by former prime minister Joseph Muscat while addressing a CEPS Ideas Lab conference in Brussels.

“We are now reaping the fruits of the seeds sowed many years ago,” Schembri told parliament.

Emphasising Malta’s role as a global pioneer, Schembri said Malta was one of the first countries to create a regulatory framework for blockchain, establishing rules that inspired the EU-wide Markets in Crypto-Assets regulation.

Malta now enjoys what he described as a “first-mover advantage”, positioning it as a prime location for legitimate businesses seeking licensing across Europe, he insisted.

Earlier, Caruana Cilia acknowledged Malta’s economic growth rate, which has surpassed 5%, and noted record employment levels.

However, he raised concerns about whether this progress reflected the experiences of Maltese citizens facing high inflation rates, which were notably above the EU average.

He pointed to the “heavy price” of economic growth, citing issues like relentless traffic, deteriorating air quality, and overstretched healthcare services.

Caruana Cilia called for a sustainable economic model that prioritised high-quality jobs and improved productivity.

'Quality over quantity'

During the debate, Schembri pointed to a shift in the government’s strategy to attracting investments that contributed higher value - rather than just volume.

Schembri harped on how the government intended to elevate Malta’s economy from quantity-focused to quality-focused growth.  

This required a change in the way Malta Enterprise was managed and a peer review into its operations was already underway. 

He announced plans to adapt the Rent Subsidy Scheme, which aids SMEs with rental expenses, into a loan repayment option, eventually enabling renters to become property owners.

Investing in the future of Malta’s workforce remained a priority, said Schembri, noting the expansion of the Get Qualified Scheme to strengthen STEM education, and proposed amendments to the Qualifying Employment Rules, which is aimed at attracting highly skilled employees by offering a favourable 15% tax rate on income. 

'Malta does not afford brain drain'

Meanwhile, employment shadow minister Ivan J Bartolo earlier said that from May to October 2024, at least 30 young Maltese couples, many with children, left Malta to seek better opportunities abroad, in countries like Ireland, Scotland, and the US.

Bartolo said Malta could not afford this brain drain.  

“These young people are leaving because life in Malta is becoming unsustainable with high property prices and an eroding quality of life.  Malta’s intellectual property is nurtured through the country's educational systems like the University of Malta and MCAST," he said.

Schembri retorted by pledging efforts to lure Maltese professionals working abroad back home, incentivising them to invest their expertise into the Maltese economy. 

13 key measures

Schembri also highlighted several new digital and physical infrastructure projects, among them the Digital Innovation Hub (DiHubMT), which will offer start-ups access to high-value equipment at a reduced cost. 

By March next year, Malta will host its first high-performance computer, a resource set to dramatically shorten research timelines and support innovative projects for local businesses. 

Additionally, a Central Data Repository, set to be Europe’s first, will simplify Know Your Customer (KYC) processes by storing authenticated identity data accessible with a single scan of an ID card or passport. 

Initially available to government entities, the repository will eventually extend to the private sector, enhancing the efficiency of Malta’s economy.

Schembri also spoke about the creation of an academy to meet the aviation sector’s growing demand. 

The academy’s training programme will compress the standard four-and-a-half-year training into 18 months, equipping Maltese students with skills while allowing them to study on-site, filling critical roles in Malta’s expanding Maintenance, Repair, and Overhaul (MRO) industry.

Schembri urged the opposition to embrace Vision 2050 as a collective mission, emphasising that Malta’s economic path forward was not merely about growth, but about achieving a sustainable, quality-focused economy.

Earlier, government backbencher Alex Muscat told parliament Malta was poised for another decade of greater prosperity.

Reflecting on the country’s progress, Muscat highlighted Malta’s remarkable transformation from an economy once marked by low workforce participation to one that now ranked among the highest. 

“I am confident,” he said, “that given the potential I see in our country and the eagerness of foreign investors who are ready to invest here, Malta can look forward to another 10 years of even greater prosperity. Let us look to the future with optimism, for I am certain that Malta’s quality of life will continue to improve.”

Other speakers included Robert Cutajar, opposition whip who expressed concern about the situation at the Crafts Village and expressed disappointment in the government’s apparent disregard for co-operatives.

Ivan Castillo, shadow minister for the fight against the rising cost of living, said taxing COLA was“unjust”. 

He underscored the unified stance taken by social partners - including employers and unions - who agreed that workers should receive their rightful share.

Government backbencher Ray Abela meanwhile highlighted the government's strategic plan to enhance the quality of life through innovation and investment in education and technology.