We’re at the dawn of a technological revolution. It is called the Blockchain revolution and Malta has chosen to lead. A clear message was sent with regard to Malta’s and this government’s determination to set an example and regulate DLT technology; tomorrow’s technology that is likely to radically change the landscape of how things operate, be it businesses, your own personal life and the public sector.
In February, when we launched our vision ‘Malta – A Leader in DLT Regulation’, a vision that was very well received and the largest companies in the world such as Binance and OKEx, announced their decision to operate from Malta and are already in the recruitment process.
What are we proposing that makes Malta a natural choice for investors or that makes Malta the ultimate choice?
The three Bills were based on three main principles – market stability, market integrity and consumer protection – all to provide legal certainty in a space that is unregulated. The enacted Bills mark the start of a new chapter for Malta.
Throughout the years, Malta has managed to reinvent itself several times. From an economy based on the textile industry and other low value added manufacturing, it has transformed itself into one based on services, high-level manufacturing and knowledge-based activities. The new laws can transform Malta into an international hub for new, emerging and innovative technology especially Blockchain, hence why the nickname the Blockchain Island is catching on so well on an international level.
In fact, several were the times when during meetings, investors referred to the Blockchain Island but they did not know where Malta is.
Evidently, this term suggests the progressivity and the fast pace at which Malta managed to come up with a legal framework that caters for what the industry and investors look for. A legal framework that embraces new technology and celebrates innovation.
The Malta Digital Innovation Authority (MDIA) will focus on innovative technology arrangements and their use cases. At the initial stage the authority will only focus on DLT and related smart contracts. The Innovative Technology Arrangement and Services law will set out the regulatory regime for the registration of technological device providers and certification of technological arrangements.
We’re aware that we’re going into uncharted waters. This is a new emergent industry, not just for us but for the world
This will set out the regulatory regime required by the MDIA to operate and it will include the registration of service providers including technical administrators and system auditors and certification of technology arrangements.
Lastly, but not least, is the Virtual Financial Asset law which will set out the regulatory regime for Malta Financial Services Authority to regulate ICOs, exchange and related service providers. All this is a result of constant discussions with the stakeholders, entities, authorities and the industry itself. We made sure to draft a legal framework that reflects the needs of our strong ecosystem, a legal framework that transposes EU directives, in particular the 4th and the 5th directive.
The ball is set, and now that the laws are in place it will start to roll for the creation of a new economic sector which will compliment our ecosystem as whole. An industry which will contribute to Malta’s economic growth, it will boost innovation and put Malta at the forefront of DLT regulation.
We’re aware that we’re going into uncharted waters. This is a new emergent industry, not just for us but for the world. We have a vision, that of making Malta the Blockchain Island and I am satisfied to say that big players in the industry are ready to contribute by providing their expertise, expert teams and know-how. Several times I was asked ‘Isn’t it risky to be the first?’, and I always replied, it is way better than being last.
Undoubtedly, Malta’s first mover advantage has produced a ripple effect with countries now closely looking at this sector. For instance, just a few months ago, the attitude towards cryptocurrencies was more towards banning and just recently there was a notable shift towards regulating. Evidently we’re setting an example and the holistic approach we took will serve as a blueprint for other countries still yet to regulate this sector.
July 4 will go down in history as the day when Malta became the first world jurisdiction to regulate this sector. I thank everyone who was involved in arriving to where we are today and also the Opposition for engaging in a well-balanced dialogue and for showing interest in the laws and what is being done in this sector.
This journey started a year ago and we have not looked back. The culmination of this exciting chapter that is about to be written will showcase itself during the DELTA Summit, the government’s official Blockchain event that is going to be organised between the October 3 and 5. A summit which will serve as a platform to demonstrate how far Malta has got in this sector, its forward-looking approach and determination to be a leader in DLT regulation.
With the laws in place, investors and operators can operate with peace of mind, contribute to Malta’s economy and safeguard consumer protection in an ecosystem that makes operators operate here. The Blockchain Island is not just a mere expression, it is a destination and with the enthusiasm and can do attitude we will get there.
Silvio Schembri is Parliamentary Secretary for Financial Services, Digital Economy and Innovation.
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