Malta has positioned itself as a pioneer in the regulatory treatment of innovative technologies, with distributed ledger technology at the forefront of its regulatory agenda.
In the spirit of decentralisation, the past few months have been characterised by a collaborative industry effort that has culminated in the enactment of Malta’s regulatory framework for DLT, comprised of the Virtual Financial Assets Act, the Malta Digital Innovation Authority Act and the Innovative Technology Arrangements and Services Act (Cap. 590, 591 and 592 of the laws of Malta respectively).
As a first-of-its-kind, this revolutionary framework seeks to crack the regulatory code by placing technology at its epicentre, attracting technologists and innovators eager to dislodge themselves from the regulatory grey area typically associated with the ecosystem within which they operate, into a regulated environment built on sound regulatory principles that promote legal certainty, instil market confidence and drive consumer adoption.
Achieving legal certainty is crucial in realising the true potential of innovative technologies in respect of which the application of the fundamental legal tenets of governance, ownership and liability remains at times subject to intense debate.
The DLT framework attempts to fuse the technological, business and legal aspects, via a combination of regulatory tools ranging from the introduction of VFA Agents, Systems Auditors and Subject Matter Experts, to the imposition of requirements relating to whitepapers, blueprints, smart contracts and cyber-security.
With technological innovations the order of the day, having a full-bodied and yet adaptable regulatory framework that is conducive to competition and supportive of innovation is a key to generating growth, not only by potentially creating new economic sectors, but also, and importantly, by improving and digitalising existing ones (a number of which will form the subject of future parts of this newly launched column, Camilleri Preziosi’s ‘Beyond Blockchain’ weekly series).
For further information, contact blockchain@camilleripreziosi.com.