While many governments are advising their citizens to stay away from cryptocurrencies and have banned transactions in them, at least one small nation has taken huge steps to encourage and regulate cryptocurrencies and more importantly, blockchain technology.
Malta, the island nation, has three pieces of legislation ready to do so. The bills have been approved by the country’s cabinet in the last week of April. These bills will now be debated in the House and once passed there, will become law.
Three Crypto-Related Bills
The three bills are mentioned below:
- Malta Digital Innovation Authority Bill
- Technology Arrangements and Services Bill
- Virtual Financial Assets Bill
Now, here are the details of their key objectives, one-by-one:
The Malta Digital Innovation Authority Bill basically seeks to create the regulating body that will oversee the entire digital currency regime, and its principal responsibilities and duties have been defined in the bill.
One of the main tasks this Authority will be entrusted with will be to issue the license or certification for firms that wish to set up Digital Ledger Technology (DLT) platforms. It would ensure the activity will attain legal status.
The second piece of legislation, the Technology Arrangements and Services Bill, will be used to control the technology side of the business and the providers of the different services within the ecosystem.
The companies setting up their business in Malta will have to register them and share the details of the technologies they work with. That is where the Technology Arrangements terminology has been used.
The third bill in the series, Virtual Financial Assets Bill, has been drawn up to handle Initial Coin Offerings (ICOs). As it is done in the case of IPOs dealing in stocks, companies issuing ICOs must have their offering vetted by the designated authority.
They must fall within the legally permitted guidelines for such offerings and the interests of the investing public must be fully protected.
Will Facilitate Smoother Banking in Malta
The spokespersons for the government of Malta seemed to indicate that in the absence of these clear legislative proposals, the banks in Malta were not sure if they can encourage businesses to invest in these segments, particularly in mining of Bitcoin or other cryptocurrencies.
That dilemma will not exist anymore. For the companies that have submitted their business plans to the authorities created through these bills and obtained the necessary permissions/certifications, it becomes easy for the banks to lend to them.
Malta’s Potential as a Destination for Crypto Industry
Malta has already earned its reputation as a financial haven. Many corporate entities have already set up their offices there and many more have expressed their desire.
The three pieces of legislation discussed here have to be seen in that perspective. Malta could emerge as a unique destination for the development of blockchain technology and cryptocurrency.
The actual results on the ground may still take some time to show up.