Attraction
Malta’s initial attraction is based firmly on its status as a crypto-friendly country with a tax policy that has corporation tax as low as 5%. Malta’s popularity has increased with the recent passing of three bills to give crypto businesses credibility, viability and give customers some security about their investments. The three bills that have passed through the Maltese parliament, the Malta Digital Innovation Authority Act (MDIA), Virtual Financial Assets Act (VFA), and Innovative Technology Arrangements and Services Act (ITASA), are all there to bring transparency and legal certainty to an industry that has been hanging in the wind as far as concise and representative legislation goes. Malta company formation here.
As far cryptocurrency is concerned regulatory framework and standards are essential to weed out the bad actors and those trying to take shortcuts in the quest for profit. In a financial landscape where people still get caught in Pyramid schemes, scams and poor investments, having a framework that brings credibility to the crypto industry can only help enhance the potential for cryptocurrency to move forward as a genuine alternative to traditional FIAT currencies.
Growing the Community
It isn’t just the existing relationships that have made Malta hub of crypto development, Malta gambling license and others have shown an interest in making Malta a base for European operations. There are also European companies that have found Malta’s approach to cryptocurrency and blockchain technologies more accommodating than their original bases of operations.
The three bills that have passed and enacted into will aim to regulate coin offerings (VFA), stipulate the set-up of guiding principles for crypto and blockchain entities (MDIA), and define blockchain-based companies and give them legal recognition (ITASA). Also, earlier this year it approached the difficult task of legally recognising Decentralised Autonomous Organisations (DAOs) and defined them as Technology Arrangements, that legal recognition is reflected in ITASA.
Malta is laying the foundations of a healthy relationship with the crypto community
External Pressures in the Future
In any relationship, no matter how strong, there can be insurmountable obstacles from outside that can cause a rift. Right now Malta is leading the way in Europe because there is no EU-wide regulation for all 27 member-states to adopt into law. Maltese parliament is free to implement rules as it applies to them right now and push the debate about how we should regulate new tech.
As yet, there are no specific outlines for EU-wide regulation of blockchain tech and cryptocurrencies, with countries creating them in “self-defence” due to the more recent mainstream adoption. Currently, EU sentiment regarding the whole blockchain environment, from blockchain implementation in government and industry to the actual currency, stretches in both directions from super-accommodating to mistrust and wanting to ban them. Any EU-wide legislation will have to navigate this diverse array of feeling, but they will also have to accommodate any country that has created a significant income and infrastructure based on the technology. Any new laws that could potentially cripple a country’s economy would be disastrous to the EU.
Navigating Stormy waters
While Maltese government is welcoming the crypto community to its shores, it must surely be making plans for the future when, potentially, it has to incorporate EU regulation into its accommodating legislature and keep their foreign crypto businesses happy. However, Malta is taking a long view and in doing so is sowing seeds of “how to do it” in the rest of the world.
The Maltese ‘Sandbox’ has plans for the future, not just in it’s welcome of business, but in creating a whole financial ecosystem friendly to crypto business. Reforming the banking system to support crypto businesses, new courses and departments in universities, these are just some of the ways to create the right environment for crypto and blockchain development.
Malta has led the way; we can only hope that it continues to shine a light on the path forward for the rest of Europe.
