The Maltese Parliament has been the first to unanimously approve three blockchain bills. The unanimous approval was announced by Hon. Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri on the 26th June. It has also been held that Mr Stephen McCarthy has duly been appointed the CEO of the newly established Malta Digital Innovation Authority. This approval has been recognised as a worldwide achievement that will allow Malta to achieve its goal in becoming a blockchain hub. Hon. Silvio Schembri noted this crucial development in his speech at the Malta Institute of Management Conference called ‘Cryptocurrency Considerations for Management’.
The rapid development of the blockchain-based business has left various entrepreneurs and technical service providers at a loss on how to regulate and licence their business. It has been highlighted that upon approval of this legislation, Malta will, therefore, become one of the first jurisdictions to regulate this business and will subsequently put an end to the uncertainty that is present within the industry.
The three Bills the Parliament of Malta has approved are:
- The MDIA Bill will establish the Malta Digital Innovation Authority (MDIA) and provide the necessary arrangements for the certification of technology and the registration of Technology Service Providers.
- The ITAS Bill (The Innovative Technology Arrangements and Services Act) will regulate the designated innovative technology arrangements. This will, therefore, include the necessary requirements for a person to register as a Technology Service Provider as well as what is required for the certification of Technology Arrangements.
- The VFA Bill (The Virtual Financial Assets Bill) will be used as the framework necessary for ICOs, cryptocurrency exchanges and the regulatory regime for services relating to virtual currencies. Under this bill, brokers, exchanges, assets managers, investment advisors, wallet providers and other market makers within the virtual currency field will be regulated. An important feature of this bill is that it distinguishes between a DLT Asset and a Virtual Financial Asset, introducing the Financial Instruments Test that will be used to determine, under which category the asset in question will be recognised. This will control which platforms the asset would be able to be exchanged within.
As the bills have been approved at second reading, Malta is close like never before to becoming a global pioneer in cryptocurrency regulation.