The Maltese Parliament approved three bills centering around cryptocurrency and blockchains in what could be a big step toward putting Malta at the forefront of these developing technologies.
The announcement was made by secretary for financial services, digital economy, and innovation Silvio Schembri on Tuesday. Schembri voiced his excitement over the passage of these bills and the appointment of a new CEO of digital innovation in a tweet:
The bills – dubbed the Malta Digital Innovation Authority Bill, the Virtual Financial Assets Bill, and the Technology Arrangements and Services Bill – are meant to make Malta a crypto and blockchain hub, enticing more companies that are working in the space to set up their businesses on the island.
The Malta Digital Innovation Authority Bill establishes and defines the duties of an authoritative body responsible for promoting and developing the innovative technology sector in Malta, defining and promoting ethical standards, protecting consumers and investors, and working to harmonize Maltese practices with EU standards, among other responsibilities.
The Virtual Financial Assets Bill outlines rules new companies must comply with when launching their initial coin offerings (ICOs), which the bill refers to as "initial virtual financial asset [VFA] offerings." Under these new laws, companies will first have to produce a white paper outlining what they are doing and how they plan to do it in accordance with Maltese laws. This bill also lays out regulations for advertisments by VFA issuers and requires each issuer to appoint an independent, registered VFA agent to oversee and advise the project. The agent would also act as a liaison between the issuer and the (yet to be specified) "competent authority" regarding the registration, white paper, and trading of the issuer's VFA on a DLT exchange.
The Innovative Technology Arrangements and Services Bill is intended for use by the Malta Digital Innovation Authority. The purpose of the bill is to guide the authoritative body in recognizing and regulating innovative technology arrangements and services. In this bill, "innovative technology arrangements" are defined as:
The Innovative Technology Arrangements and Services Bill provides principles for the authoritative body to register technology service providers and certify innovative technology arrangements, in accordance with their purpose, qualities, attributes, etc.
These laws are part of a larger trend: Over the past year, Malta has made headlines as a growing hotspot for blockchain-related technology and business. In September 2017, the Maltese government established a blockchain taskforce to develop a national strategy to benefit from blockchain technology. In April of this year, OKEx, one of the world's largest digital asset exchanges, announced plans to move its operations to the country. In May, BitBay also announced plans to move to Malta in reaction to Polish banks refusing to do business with the exchange.