Malta: a Hub of the Crypto World

August 17, 2018 7:56 am

Katya Cryptonovich


at Cryptonomos

All posts

If you’ve been following the news, you may have noticed that Malta, Southern European island country, is quite a hyped topic for the crypto community. As of now, so-called ‘blockchain island’ attracts more and more blockchain specialists across the globe. But what are the reasons behind Malta’s appeal? Sit back, put your finger on a scroll wheel and read why the country is well placed to be a fertile ground for crypto investors and businesses.

How did this solely tourism-oriented country become a safe haven for blockchain and crypto-based businesses?

Firstly, it’s all about supportive regulatory measures. In order to strengthen Malta’s position as an attractive destination for crypto businesses, and crypto exchanges in particular, in May, 2018 country’s government has decided to introduce a comprehensive regulatory environment for companies offering services in the crypto field. It introduced for reading in the parliament three bills related to blockchain, which were later approved during the second parliamentary reading on June 26.

These three bills are nothing but ‘Three Pillars of the Malta’s Innovative Economy’, in a manner of speaking. The first one, the Virtual Financial Assets Act (VFA) will regulate ICOs.  The second one, the Malta Digital Innovation Authority Act formalizes regulatory procedures for the cryptocurrency and the blockchain industry at large. And the last Technology Arrangements and Services Bill details the registration and certification of technology service providers, technology arrangements, and registration of exchanges in Malta.

These regulations make Malta one of the very few countries which can boast with such policies and truly recognize crypto and its underlying blockchain technology. Malta’s Junior Minister for Financial Services, Digital Economy and Innovation, Silvio Schembri believes:

“We were given the title as being the world’s blockchain island due to the way the Maltese government views blockchain technology as a whole. While other countries are typically looking at crypto and blockchain for short-term gains, we understand what blockchain technology can offer in the long run”

Following all the hoopla relating to Malta’s supportive regulations, several crypto-based companies and exchanges, such as fundraising platform “Neufund”, the digital asset exchange OKEx, and the blockchain platform Poseidon Foundation has already decided to move to the country. And it comes with no surprise as the laws approved will attract more crypto-based companies. It implies a greater legal clarity, competitive tax regime, and excellent business infrastructure.

Plus, Malta could be an ideal safe haven for Chinese blockchain-based projects, as China’s government has trenchant position relating to cryptocurrencies. For example, even one of the globe’s biggest exchanges, Huobi, was forced to leave China in September last year because of severe legislations.

Well, let’s get back to Malta. One of those companies which have decided to move particularly to the island is Binance, the world’s largest cryptocurrency exchange. Silvio Schembri, believes Binance’s presence in the country will strengthen the Malta’s authority among other investment attractive regions:

“This is a clear vote of confidence in our country and the work being done in this sector, mainly by the latest policy launched to offer a regulatory framework of distributed ledger technology operations. Binance’s presence in Malta sustains our vision, that of making Malta ‘The Blockchain Island”

Binance has already opened a bank account in Malta. And exchange’s plans to enable fiat-to-crypto deposits and withdrawals are fully backed by Maltese government’s plans and intentions.

Furthermore, world’s second largest crypto exchange OKEx also moved to ‘Blockchain Island’. Following the meeting with Malta’s regulators, OKEx representatives seem to be “confident in the Malta government’s approach and further OKEx growth”.

As of now, Malta looks like a textbook example when it comes to fintech sector. An entire crypto community hopes that Malta’s warm welcome of crypto-based businesses and exchanges will influence other regions, where holding the crypto is considered as almost a sin.
Will we see more exchanges moving to Malta? Time will tell. But still, it can safely be said that more and more startups and exchanges will move to regions that have pro-blockchain legislature and are led by forward-thinking regulators.
Thankfully, Malta is not alone. Some countries are also about to mitigate the regulatory measures relating to crypto projects. In our next article we’ll tell you about Malta’s direct competitors for the ‘Throne of Blockchain World’ such as Belarus and Japan.
Stay tuned!

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