When in February Malta presented a policy document drafted for the purpose of introducing blockchain regulation and the creation of the Digital Innovation Authority, there were nonetheless complaints about the possibility that Malta had already missed the train.
It appears as if Malta was, just as when the remote gaming regulations were introduced in 2004, right on time. The environment that blockchain and Digital Ledger Technology (DLT) application companies are operating have turned increasingly hostile only in the latest months.
Both Facebook and Google have announced plans of banning advertisement of cryptocurrency-related financial services. American regulators have practically signalled that they regard most Initial Coin Offerings (ICOs) as likely illegal.
Certainly, the attractiveness of launching an ICO is without doubt grounded in the fact that it is unregulated and a much easier way of raising capital for a business than going through an IPO. But there are also technological advantages and all related benefits of the new paradigm of peer-to-peer transactions without the use of intermediaries.
Blockchain carries potential for political as well as social emancipation that has yet not been feasible or practically manageable across human societies
The Malta Digital Innovation Authority will provide certainty in this field of legal vacuum and be able to certify DLT platforms and provide a framework for ICOs that the industry can trust.
This has now prompted the largest cryptocurrency exchange, Binance, to decide on a relocation to Malta. Binance handles a daily volume of transactions ranging at some $1.6 billion. Recently it was announced that also OKEx is planning on relocation, with its $1.5 billion in daily trading volume.
With such players taking up base at the island, Bloomberg reported that Malta is on track to become a blockchain hub. Personally, since being active in the space, I receive between one to three messages per day from companies active in the blockchain field who are curious about relocating to Malta.
Additionally, 2018 will be the year of the first Malta Blockchain Summit, which will take place on November 1 and 2 and is expected to bring some 4,000 delegates to the island. This massive summit will without doubt be one of the largest blockchain events in Europe this year.
Prime Minister Joseph Muscat is already confirmed as one of the keynote speakers at this melting pot for global tech influencers. Other prominent speakers include Miko Matsumura, the Founder of Evercoin exchange.
Malta’s embrace of blockchain is even envisaged to help undocumented refugees to be able to verify their education through a programme developed by the start-up Learning Machine and MIT Media Lab. It has already been launched at Mcast and ITS.
Although these are delightful developments, we have yet only seen a fraction of the potential of blockchain and DLT technology unfold. The World Bank has for instance concluded in a study that DLT might partially or entirely replace government and the State as the agent behind identity authentication, certificates, land titles, health record storing, dissemination of social benefits and the management of democratic votes.
In other words, blockchain carries potential for political as well as social emancipation that has yet not been feasible or practically manageable across human societies. With the bold move to introduce regulations for blockchain, Malta has now positioned itself at the centre of this emancipation.
Dennis Avorin is a Malta-based professional policy analyst passionate about the digital economy.