Malta has earned a well-deserved title of “Blockchain island” – it is the first jurisdiction in the world to introduce blockchain regulations. The Maltese government views the blockchain technology as a whole, while other countries are typically looking at crypto and blockchain for short-term gains. It’s fair to say that Malta legislators understand what the blockchain technology can offer in the long run.
In July 2018 when the Maltese parliament passed the regulatory bills, Silvio Schembri, Junior Minister for Financial Services, tweeted:
The 3 Bills that will regulate DLT have been approved by Parliament and enacted into law. Malta , the first world jurisdiction to provide legal certainty to this space. #blockchainisland @JosephMuscat_JM
— Silvio Schembri (@SilvioSchembri) July 4, 2018
These 3 bills provide comprehensive legal framework that addresses a number of problems faced by the industry. But what are they and what makes them such special piece of legislation? Here is a quick summary of each bill:
The first one is the Malta Digital Innovation Authority Act (MDIA Act), and it establishes the Malta Digital Innovation Authority and certifies DLT platforms. This law will focus on internal governance arrangements and will outline the duties and responsibilities of the Authority to certify DLT platforms to ensure credibility and provide legal certainty to users wishing to make use of a DLT platform.
The second is the Innovative Technology Arrangement and Services Act (ITAS Act), deals with DLT arrangements and certifications of DLT platforms. This bill is primarily concerned with the setting up of exchanges and other companies operating in the cryptocurrency market.
And the third law, known as the Virtual Financial Assets Act (VFA Act), establishes the regulatory regime governing ICOs, cryptocurrency exchanges, wallet providers, etc.
Additionally, these bills reflect the European Union (EU) laws onto Maltese laws. There are 3 basic core principles that the bills abide to – market integrity, consumer protection and industry protection. The main difference here is that the bills have a principles-based approach, rather than a rules-based approach. Hopefully, they will flourish amidst a highly-unregulated environment.
That is why Malta is so attractive to the biggest players in the industry, hence Binance and OKEx already set up shop there.
Blockchain PR is at the Malta Blockchain Summit