Innovation can offer incredible investment opportunities, but when it comes to new and emerging technologies like AI and blockchain, regulatory authorities also have to stay vigilant to ensure that important rights like privacy and freedom of expression are protected.
Stephen McCarthy is the first CEO of the Malta Digital Innovation Authority (MDIA), which promotes governmental policies that highlight Malta as the centre for excellence for technological innovation.
We spoke to him about being at the forefront of technological evolution.
“It is definitely interesting, but also very challenging,” McCarthy said. “We have set up a robust regulatory framework, so the starting point is good.”
MDIA is responsible for regulating new technologies. How something that will one day have a big effect on our lives, but for the most part, still doesn’t exist, be regulated?
“I would disagree with the premise of the question a little bit. The future is here already. Applications for Distributed Ledger Technologies, blockchain and AI are already here and working.”
Silicon Valley is synonymous with technology and start-ups. Malta could potentially have a leadership role in something like blockchain, which could in future be a major sector in the global technology world.
McCarthy travels a lot, meeting stakeholders and institutions that are willing to enter the blockchain age. He has already received positive signals from international partners about Malta’s role in the process.
We can be leaders in this field
“The initial feedback for our regulatory framework has been really encouraging. There is a real sense in many international institutions that we can be leaders in this field. “In fact, many foreign institutions have changed their minds about blockchain in the last six months. This change in the attitude towards blockchain happened fast. Now they are interested in new applications and integrations and are looking for leadership.”
New technologies can sometimes emerge so rapidly that we can struggle to adapt the language we use around them. Things like blockchain and cryptocurrencies easily get pooled together.
“It is time to make a difference between blockchain and cryptocurrencies. Many foreign institutions were mixing the terms and technologies,” Mr McCarthy said. “Blockchain is so much more than cryptocurrency technology. It could be utilised in multiple ways from shipping management to healthcare and education.
“The blockchain side is still very cryptocurrency-lead, but we want to develop the other uses as much as possible,” he added.
“We have chosen to take a path of robust regulation with user safety as top priority.”
That doesn’t mean that MDIA exists to create legislative red tape for its own sake, far from it.
“Now we are looking into lowering some regulatory hurdles in areas like software, where testing for licences can be expensive and even hurt innovation,” McCarthy said.
“In fact, I can say with confidence that without our efforts here at MDIA, authorities like the Malta Financial Services Authority would have a harder time with some of their operations like handing out new licences to companies dealing with new technologies.
What’s the big theme for blockchain for 2019?
“The confirmation that it can be useful in broad areas of society, that it is relevant.”
Could Malta have a big role with the booming AI technology too? “It is also important to keep AI and blockchain separate. The AI field is dominated by two huge players, China and the US, and they don’t leave much space for others. There we need to find niches like healthcare and education where we can be leaders.”
MDIA is a young organisation and the field is changing all the time.
“It is a really exciting time for us. We are the only institution like this in the world. We are now a different organisation, with different experiences than we were six months ago, and in six months the world has already changed again and taught us new experiences.”
That’s why summits like Malta AI and Blockchain Summit are important events for MDIA.“We always want to attend, to give speeches and talks, and to mingle on the expo floor. Every time we go, we learn something new.”
This is an important year for Blockchain and MDIA. We will see if new applications find popularity and if some of the speculative cloud around blockchain scatters away.
McCarthy has no doubts that it will be a part of our future. “Blockchain is here to stay.”