Business

Gerald Fenech

Malta continues to forge ahead in blockchain sphere

The small country in the EU that punches above its weight is Malta, and it’s not looking back especially where the blockchain industry is concerned. After the announcements that Binance and OKEx will eventually be moving some of their operations to Malta, it appears that the country’s Financial Services Authority has come up with a proposal for a Financial Instrument Test, which should distinguish between what assets that come from initial coin offerings (ICOs) are actually securities. This should lend some authority and standing to the ICO market which has taken battering in recent months due to large number of scams and failed ventures.

Last week, the MFSA published a consultation paper and the general public has until May 5 to make representations. All this ties in with the announcement of the Virtual Financial Asset Act, which seeks to give some legal ground to the blockchain and ICO industries in Malta. Parliamentary Secretary for the Digital Economy Silvio Schembri has been actively courting the blockchain and cryptocurrency sectors in a drive to establish Malta as a blockchain hub.

Malta has consistently been in the news of late after the announcement of cryptocurrency exchanges Binance and OKEx that they’re moving to the island, although to be fair, there is still a lot of uncertainty over how this will actually happen. To date the local banking industry has remained very resistant to the cryptocurrency space and if Binance and OKEx want to operate a fiat-to-cryptocurrency exchange, they will need a major bank to back them up. The turnover of both exchanges exceeds the $1 million mark a day, so it would have to be rather a large bank to be able to handle such transactions.

Incidentally the founder of digital currency Tron, Justin Sun, also waxed lyrical about Malta in a tweet. He congratulated Prime Minister Joseph Muscat on his vision to make Malta ‘the Blockchain Island’ whilst confirming his interest in bringing his TRON project to Malta. However, again, it is still not clear what Sun intends to set up in Malta yet. Cryptocurrencies and ICOs have come under intense scrutiny in China, Hong Kong, South Korea and Japan so this strategy by the major players in the industry to announce moves to other jurisdictions could appear to be a diversionary tactic.

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