Blockchain Island or Crypto Atlantis?Malta struggles with crypto adoption | Via ChangeNOW.io | The Capital | June 2021
As early as 2018, Malta became First country Introduce comprehensive cryptocurrency laws on the planet. Since then, Malta has been trying to become a “blockchain island”, but it has not been unsuccessful-the country has become the home of the world’s leading cryptocurrency exchanges Binance and OKEx; a Chinese exchange ZBX has also moved to Malta.
The Maltese government expressed its enthusiasm for blockchain and cryptocurrency, and even plans to establish a blockchain-based traffic systemHowever, the concept of “blockchain island” is currently in danger: many encryption companies based in Malta have not sought government permission, and those seeking government permission are still unable to obtain it. The first company was only licensed in Malta in November 2020.
In this article, we will explore why Malta is called the “blockchain island” and what are the limitations of realizing this concept in real life.
Malta is a small island in the middle of the Mediterranean. This piece of land has limited resources, but it has learned to profit from its unique geographical location and the talents of its people. With its lofty monument, remind The mysterious Atlantis to many, Malta has constantly confused the plans of the unfriendly Mediterranean Empire throughout its 7,000-year history.
Adapting to new conditions has always been one of the key factors for success, and it has made progress in the Maltese mentality. Now, in 2018, adaptability has helped Malta realize the potential of blockchain and introduced friendly new policies for anyone involved in this new technology.
Soon after Malta joined the European Union, public interest in financial technology increased significantly. What follows is the concrete result: 10% of the current Maltese economy depends on finance and digital technology for its livelihood.
Although interest in innovative finance is on the rise, blockchain technology has attracted a lot of attention in Malta from the very beginning. Malta blockchain and encryption enthusiasts formed two associations-Bitmalta and Blockchain Malta Association, which further helped lead the government in adopting the world’s first encryption law.
As early as 2017, the Maltese government was very keen on blockchain and cryptocurrency. The acting prime minister at the time Joseph Muscat (Joseph Muscat) expressed his enthusiasm for embracing all the possibilities offered by new technologies. A few months later, the Malta Financial Services Authority (MFSA) launched the first version of encryption and ICO legislation.
Malta has a huge advantage: the world’s first clear legal framework is designed to attract entities seeking regulatory certainty. In October 2018, the Maltese Parliament passed the first comprehensive Distributed Ledger Technology (DLT) legislation. These are three complementary laws:
MDIA was established in 2018 to promote blockchain technology. The MDIA Act stipulates the registration and management methods of DLT companies and describes the responsibilities of certification bodies. The MDIA Act aims to ensure investor protection and regulatory oversight in the DLT field.
The bill aims to bring certainty to the registration and certification process of technical arrangements for technical service providers. In 2017, everyone was skeptical of cryptocurrency and had heard of scams in the industry, so the goal of the ITAS Act is to reassure everyone that any cryptocurrency company located in Malta is safe and a legal investment.
The bill gives a definition of cryptocurrencies (ie virtual financial assets) and states that they are “used as a digital exchange medium, unit of account, or store of value.” The VFA Act contains regulations regarding cryptocurrency exchanges, ICOs, cryptocurrency wallets, and other entities involved in digital currency transactions. According to the VFA, cryptocurrency transactions that seek to register in Malta all have one year to comply with the regulations.
Malta’s efforts to create clear encryption regulations have been warmly welcomed in the community. Although the idea of establishing a legal framework is popular in other countries, many major crypto companies have announced their migration to Malta.
However, the situation in 2021 does not look so good. Although many other countries have enacted cryptocurrency-friendly laws, Malta’s adoption of blockchain seems to have stalled: so far, only a few companies have obtained official licenses. Maltese authorities. Does this herald that the “blockchain island” legend will become the story of “cryptographic Atlantis”?
It started in April 2020, when we saw in the news that only 70% of crypto companies already operate in Malta have already applied Used for government licenses (26 entities), not even Binance. Some experts claim that the MFSA’s requirements for licensing are too high. In addition, as of April 2020, according to the law promulgated in 2018, no company has obtained permission from the authorities.
In December 2020, Clyde Caruana, Minister of Finance and Employment of Malta Accepted Local banks are skeptical of cryptocurrencies. “Traditional banks have eliminated blockchain in the early stages,” Caruana said, because they don’t think it is the technology of the future. In addition, the Minister also pointed out that Malta’s emerging industries lack local skills, which would distract investors.
In November 2020, the Crypto.com cryptocurrency payment platform became the first company to be licensed by the MFSA.
Although the blockchain strategy is faltering in Malta, this does not mean that things look bad in the long run. Several basic factors indicate that the Maltese cryptocurrency industry will eventually find a way for widespread adoption:
- Although many people think that Malta’s encryption laws are complicated, after all, the Maltese government is very friendly to encryption and innovation. The government’s intention to cultivate blockchain technology is expected to overcome current difficulties.
- Malta’s stable economic and political environment is attracting many companies seeking predictability. For example, the new Malta government elected in 2020 reiterated its commitment to the development of the blockchain industry.
- Malta must provide a strong infrastructure in all areas related to encryption. The coverage of advanced financial services, gaming, and 5G is not complete.
Malta introduced the world’s first encryption legislation in 2018, promising to become a “blockchain island”, attracting major encryption companies from all over the world. However, the event encountered unexpected difficulties: many companies did not want to obtain permission, and local banks were skeptical of blockchain. To date, few licenses have been issued.
November 2021, Artificial Intelligence and Blockchain Summit Is to participate in Malta. In this world’s largest crypto forum, enthusiasts from five continents will discuss the future of the industry. We don’t know whether Malta’s “blockchain island” dream will come true-but holding such a large-scale event cannot have any impact on the development of things in Malta. We will follow the news and provide you with the latest information.