The Blockchain Island: Malta

Blockchain

Not too long ago, Bitcoin was among the first cryptocurrencies which took over the world by storm. Suddenly, the regulation-free digital currency became a favourite for investors around the world and attracted several others in large numbers as its value grew by leaps and bounds. Those who had invested in this new currency at an earlier stage turned rich overnight.

Soon, a number of other cryptocurrencies made an entry in the market around the globe. These cryptocurrencies use a unique ‘open ledger’ system to record peer-to-peer transactions which keep the whole experience transparent for everyone. This way of keeping the record, however, removed the need for middle players which control the currency flow – for example, banks.

The blockchain system and cryptocurrencies, thus, faced a backlash from governments around the world. However, one small country in the European Union decided to take its own course and coming out strongly in support of the blockchain technology. The movement to make Malta a ‘blockchain hub’ gained weight after the Labour Party government was re-elected.

The Maltese government has ensured that this small island country becomes a leading player in adopting the blockchain technology to attract businesses. To show its commitment and gain the trust of investors, the Maltese Parliament passed three bills in July this year establishing a regulatory framework for the blockchain technology.

Silvio Schembri, the Junior Minister for Financial Services, Digital Economy and Innovation in the office of Prime Minister of Malta, took to Twitter after the bills were passed and said: “The 3 Bills that will regulate DLT have been approved by Parliament and enacted into law. Malta , the first world jurisdiction to provide legal certainty to this space.” (sic)

This step by the Maltese government has instilled a sense of confidence and has provided a certainty for the future. Adding to this, a hostile environment in other countries around the world, the smallest member of the European Union has now managed to attract two of the largest cryptocurrency exchanges.

Throwing his weight behind the new technology after the crypto giant Binance made an official announcement that it was moving to Malta, the Maltese Prime Minister Joseph Muscat made a bold statement: “The concept of cryptocurrencies excites me as it strikes at the heart of a key philosophical element that economy students are taught at the beginning of their course.”

Moving further, he expressed his confidence in a strong and stable future for the cryptocurrencies. “Millions of people already attribute value to virtual currencies, which has created an entirely new market. The concept sounds confusing right now, but I have no doubt that it will form the base of a new economy in the future. Just as we attribute value to pieces of paper, so too will future generations attribute value to electronic storage systems,” Muscat added.

These words by the leader of Malta have ensured that more crypto giants will soon pack their bags and set base in the Mediterranean archipelago. After Binance’s move, OKEX Technology Co., Neufunf, The Abyss, and Tron have already given an indication that they are planning to move their operations to Malta. This would mean Malta becomes the largest and the first Cryptocurrency and Blockchain hub in the European Union and the West.

Not just stopping at this, a more tangible change is also being seen on the ground in Malta as the country announced recently that it will set up two-way bitcoin ATMs across the island. These bitcoin ATMs have been created by a company named MoonZebra and will enable the users to buy, withdraw and deposit bitcoins. Currently, the ATMs will only be able to accommodate bitcoin users but it is expected that other cryptocurrencies will also be added to the system in near future.

“Domestic job crea­tion is a certainty. In March, Binance CEO Changpeng Zhao stated in a blog post that the exchange is aggressively ex­panding and aims to increase its workforce by 2,000 this year alone – there is no doubt that many of those jobs will be Malta-based. The knock-on effect will be evident in other economic areas. With a greater pool of big-name companies, Malta will inevitably attract more young foreign professionals who bring with them new digital skill sets,” Media­rex Sports & Entertainment CEO Alexandre Dreyfus stated in an article written for Times of Malta.

These positive responses those who support blockchain technology prove that Malta has made a smart move leaving behind some of the biggest economies. The ‘blockchain revolution’ has created the first ‘blockchain island’ and the world is looking at Malta in anticipation to see how it pans out from here. For now, it seems like a win-win situation for Malta.