Malta, a small island in the heart of the Mediterranean sea, already gained a reputation for itself, due to its widely reported commitment to launch the ‘ Blockchain Island ‘ in an industry where regulatory allegiance reaches as far as the most desirable conditions for support.
With the Island’s dedicated attention on becoming a technological heaven, where breaking-edge technology blossoms from one corner of the globe to the next in the digital economy, Malta is now a flourishing igaming hub above and beyond blockchain, and is now also involved in becoming AI- friendly country.
Besides Malta, other smaller countries or dependencies (like Gibraltar) also acknowledge advantages that could offer blockchain and cryptocurrencies. The stunning Mediterranean island of Malta has built itself as a sanctuary for blockchain technologies and crypto-currency businesses after it passed laws in November 2018. With low tax rates, crypto-friendly regulation and an open-minded, tech-savvy Government, Malta or ‘Blockchain Island’ as it is known, possesses all the ingredients for businesses to succeed in this sector.
At a moment when nations around the world are expressing skepticism regarding cryptocurrencies if not cracking them down on them, Malta is writing laws that would provide greater transparency to exchange operators and customers. These regulations will regulate how dealers, platforms, fund managers and traders behave, rendering them to one of the broadest legislative guidelines throughout the industry.
According to Maltatoday, Malta’s Finance Minister, Edward Scicluna says : As a small nation it can implement ideas faster than larger countries, giving it a real competitive advantage. Malta’s economy is currently buoyant, growing at 6.6% per annum, one of the fastest growing in the world.
Malta’s tax structure means firms will reduce their tax rates from 35% to just 5%, and the university in Malta also has a program to allow students to pursue a blockchain master’s degree, showing that Malta thinks this technology is the future of finance.
The Positive thinking attitude of the Maltese government to blockchain legislation, their low corporation tax, being part of the European Union (EU)-zone and the good climate that encourages the large number of various blockchain-related businesses to migrate to Malta and the migration pattern is gradual.
As per Forbes, Siim Ounap, the COO for Celerexx, a new exchange launching in 2019, commenting on the jurisdictional landscape said: “The Maltese government has been seeking to get crypto-related companies to boost their economy for quite some time and they been successful in their approach.”
Siim Ounap further stated that “While their governmental services and legal procedures are behind e-countries such as Estonia or Lithuania, special regulations allow Celerexx to offer lower prices and better services to our customers, which makes [for us] the move to Malta worthwhile.”
Back in November 2018, Malta passed three laws governing blockchain space, a move aimed at positioning the island as a leading nation regarding emerging technologies. That resulted with a whirlwind of foreign attention from the crypto companies around the world.
However, many players have baulked at the regulatory and financial requirements of obtaining a Maltese license and have since turning their eyes elsewhere. As of now Malta passed regulations aimed at bringing the blockchain industry to the island yet it has not been licensed to a single crypto exchange or business using financial blockchain software. The Malta Financial Services Authority (MFSA) said it has received 18 applications so far, 13 of which have been for the exchange of Virtual Financial Assets (VFA).
As per Timesofmalta, why no companies had been licensed as operators yet, the MFSA said it was applying high standards in the on-boarding process to ensure only operators who have the required levels of governance to ensure proper business conduct and the highest standards of anti-money laundering controls entering the financial services sector. The MFSA said the first licence for VFA operators like cryptocurrency exchanges were expected to be issued in the second quarter of 2020, due to the corona crisis, it can be delayed further.
However there are fears regarding the potential of Malta to become ‘ Blockchain Island ‘ may be hindered by regulatory obstacles in securing a license to operate and open bank accounts. Cryptocurrency sector companies have struggled to open a bank account in local banks, where they are reluctant to take on the risk by opening accounts for them.
Germany enacted a law which allows companies to have a German license to trade with German citizens. If other countries replicate this, there may be challenges to Malta as a hub for cryptocurrency and blockchain companies.
Although investors have been facing challenges by going through regulatory hurdles in the short run. In the long run given the positive approach it had and while other countries suspicious at crypto and blockchain, Malta is grabbing the opportunities it represents, providing a boost to the island’s economy.
Often with low tax levels, crypto-friendly legislation and an open-minded, tech-savvy government, as it is called, Malta or ‘ Blockchain Island ‘ has all the ingredients for companies to thrive in this sector.
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