Governments around the world have had policies as regards the acceptability or lack thereof of cryptocurrencies. While some countries have outright banned them, few countries have embraced cryptocurrencies and are creating an enabling environment for them to flourish. China’s ban on ICOs in 2017 was highly unfavorable for cryptos and shortly after the news dropped, crypto prices took a nose dive.
After recovering from the shock, many cryptocurrency firms decided to move to a friendlier environment. As if the news from China wasn’t enough, South Korea followed suit and the European Union (EU) and the US began to speak about the desire to regulate the cryptocurrency market. When China and South Korea started becoming uncomfortable for cryptocurrency firms, they moved to Japan. Unlike its Asian neighbors, Japan had regulations in place that were favorable for cryptocurrencies but recently, there have been the introduction of strict regulations to curb hacks and, seemingly a response to the Coincheck Hack that happened early 2018. This has forced some of the biggest blockchain and fintech companies to begin the search for friendlier jurisdictions.
There are countries in the world that are known for their technological advancements – China, Japan, the USA, South Korea, and major EU countries. Tech advancements are usually concentrated in these countries. But when Malta is mentioned, technology is not usually the first thing that springs to mind. Things, however, are not as they seem on the outside, as Malta is fast becoming a hub for digital currency activities. They have policies that greatly favor cryptocurrency exchange platforms. This is possible due to the fact that regulatory plans are being formulated with input from cryptocurrency stakeholders. This move is a very rare one considering the fact that in most countries, government agencies almost do not want cryptocurrency exchange platforms in their jurisdiction or are still wrapped up in bureaucracy trying to figure out how to deal with this emerging technology.
Another reason why cryptocurrency exchange platforms are finding the tiny Mediterranean Island favorable is the fact that the Prime Minister, Joseph Muscat, is a firm believer in cryptocurrency and blockchain technology.
With the influx of giant cryptocurrency exchange platforms like Binance and OKEx, Malta is fast establishing itself as the premier destination for Cryptocurrency and Blockchain Companies due to its friendly regulations and frameworks for crypto. Take a look as we delve into the “Blockchain Island”
Malta: A Growing Blockchain Island
Malta has so far provided a favorable environment for cryptocurrencies to flourish. It’s policies have attracted giant cryptocurrency exchange platforms. The country is seeking to become one of the world’s friendliest jurisdictions for the cryptocurrency sector that has been a source of concern for other governments. The Maltese government regulatory framework will cover different people such as crypto traders, asset management, and exchange platforms. This would make it the most comprehensive crypto regulated framework in the industry.
All of these have brought in cryptocurrency giants like Binance and OKEx, and such move has raised the status of the country in the cryptocurrency scene.
Valletta, Capital City of Malta. Image from Unsplash.
Europe is relatively quiet as regards its stance on cryptocurrency regulation, and this seems to be working in favor of Malta, with things about to get interesting for Malta and the European Union as a whole. While other countries continue to crack down on cryptocurrency and blockchain technology, Malta and the EU seem to be taking the lead in the rapidly growing cryptocurrency industry.
On March 23, 2018, Binance announced via a post on its Medium account that it would be setting up an operational base in Malta. According to the blog post, the decision to move to Malta was taken after it had considered several different viable locations before settling on the island nation of Malta. The news immediately sparked interest throughout the community based on the pedigree of Binance and the events that had occurred in the lead up to the announcement.
The Prime Minister of Malta, Joseph Muscrat, posted on Twitter personally welcoming Binance to the Island.
Welcome to #Malta ???????? @binance. We aim to be the global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world class fintech companies -JM @SilvioSchembri https://t.co/3qtAQjOpuQ
— Joseph Muscat (@JosephMuscat_JM) March 23, 2018
OKEx Move to Malta
On Thursday 12 of April 2018, OKEx, another major cryptocurrency exchange platform, announced via a post on its website, that it would be moving to Malta. The Hong Kong-based company becomes the second major cryptocurrency exchange platform to embrace the tiny Mediterranean Island after Binance, the world’s largest cryptocurrency exchange platform also announced plans to establish a new office in Malta on March 23, 2018, with the country’s Prime Minister welcoming them with open arms. OKEx, like Binance, has a presence in Hong Kong and Japan.
The Hon. Silvio Schembri (middle) meets with OKEx Chief Risk Officer Tim Byun (right) and Vice President Jason Lau (left). Image from OKEx.
OKEx Technology Co., whose virtual currency venue stands at number 4 by traded value on Coinmarketcap.com, has firmly decided that the Malta foundation is the place for its growth. According to the CEO of OKEx, Chris Lee, he sees Malta as a forward-thinking country. With Malta’s friendly crypto regulation and its plans to expand, Chris positively believes that the move will greatly favor the cryptocurrency exchange platform, and the move will be highly beneficial for the company. He has also gone on to say that company is excited to work with the Maltese government, as it is forward thinking and shares the same values as the company.
Chris Lee, however, isn’t the only one who attributes the company’s move to Malta because of the country’s friendly crypto policies. Tim Byun, who is the Chief Risk Officer and Head of Government Relations of the platform, also praised Malta for being a crypto friendly country. He said that Malta’s Virtual Financial Asset Act serves as a solid foundation for cryptocurrency exchange platforms and the government to work together in fostering the nascent technology/digital asset industry.
Malta Digital Innovation Authority
Unlike many other countries trying to put a sledgehammer on cryptocurrencies, the Maltese government is doing the direct opposite. It is opening wide its arms, to cryptocurrency exchange platforms and creating an enabling environment for them to flourish.
Earlier in the year, the country began making plans to establish the Malta Digital Innovation Authority. According to a national news outlet in a February 2018 article, the body will be saddled with the responsibility of regulating the cryptocurrency market and also creating a conducive environment to attract other cryptocurrency exchange platforms into the country.
This initiative is being spearheaded by Silvio Schembri, Malta’s Parliamentary Secretary for the Digital Economy. He has already outlined a 3-step process that would make Malta become a crypto powerhouse. The first step is setting up the Malta Digital Innovation Authority. The second step involves the passing of appropriate pieces of legislation that would create the structure for the certification of companies. The third step will see the regulation of the ICO market.
Parliamentary Secretary Silvio Schembri, Image from Malta Today.
According to The Times of Malta, Silvio Schembri, in Malta, said a few weeks ago that Malta became the first country in Europe and possibly in the world to come up with a regulatory framework on DLT technology. The framework was eventually very well-received and the feedback from the public consultation was quite encouraging. He also said that there was hope to go through the parliamentary process with the Bill that will set up the Malta Digital Innovation Authority and equally offer legal certainty to this space.
Other Crypto Firms Coming into Malta
Malta’s crypto-friendly environment has not only attracted Binance and OKEx. There are lots of crypto exchange platforms that have moved or have indicated very strong interest to move to the Mediterranean Island. With the unfriendly and cold vibes these crypto companies are getting from other countries, Malta seems to a haven for cryptocurrencies.
Tron, a U.S.-based blockchain company, is strongly considering moving to Malta. According to Justin Sun, CEO, and founder of the company, he said that he strongly supports Prime Minister Joseph Muscat’s plan to create an enabling environment to attract blockchain-based companies to the country. According to a tweet he made on Twitter, he supports the great foresight of the Prime Minister and hopes to build up a blockchain-based Island with the Maltese government. He also wrote that the company was strongly considering moving to Malta, following the announcement made by its strategic partner, Binance.
Another crypto company interested in moving to the Island is Monaco. According to the CEO, Kris Marszalek, it is also a firm supporter of the policies of the Maltese Prime Minister and the regulations in place are highly favorable, as it is considering moving to Malta.
Malta Blockchain Summit
Inspired by the recent initiation of Malta’s Virtual Currency Act and the skyrocketing interest in Malta as an upcoming blockchain jurisdiction, the Malta Blockchain Summit will be held for the first time this year on the 1st to 2nd November at the Malta InterContinental in St Julian’s.
Blockonomi is pleased to be a sponsor of this event and will be attending in person, if you decide to pay a visit – we will see you on the Blockchain Island!
While countries like China, South Korea, and the US have created unfriendly atmospheres for cryptocurrencies, Malta is striving to set itself to be a crypto hub. Its regulations, unlike any other, benefit crypto companies. The little Island, who is a member of the European Union, has decided to stand out in the cryptocurrency world.
Strict regulations and outright bans from other countries have pushed blockchain-based companies to seek for friendlier places to call home. With the continuous crackdowns going on in other countries, it might continue to drive more crypto players into the country.
With the influx of these players and the Prime Minister’s progressive stance on cryptocurrency, Malta might just become the crypto hub and the world’s Blockchain Island.