How Malta is Becoming a “Blockchain Island”
Malta has been making the news as a country on the forefront of blockchain adoption, and the small island nation is attracting cryptocurrency and blockchain companies to its shores. There are certainly more than a handful of other states making similar efforts, but Malta may well emerge from the pack.
Malta sees blockchain as more than just an opportunity for extra business. Some other countries are giving attention only to the negative aspects of cryptocurrencies, but in doing so, they fail to realize how the underlying technology could transform the public sector. On the other hand, the Maltese are actively working to integrate the technology and improve their country across the board.
The Parliament of Malta unanimously passed three different blockchain-friendly pieces of legislation, which laid the legal framework for acceptance of the technology. Their goal for companies was to be principle-based and provide legal-certainty. In this manner, Malta-based companies have the room to be innovative while knowing that the Maltese government won’t pull the rug out from under them. If you haven’t been following international cryptocurrency-related companies, it’s important to know that the latter occurs much more frequently than one might think.
In response to the friendly regulations, several big-time cryptocurrency projects have made moves to transition themselves to the country. Here’s the lowdown on the companies, what they’re doing, and how they got there.
Binance
Already one of the top cryptocurrency exchanges, Binance was founded not too long ago in late 2017. Originally based in China, the founder CZ was quick to move out of the country before the government began a crackdown on businesses in the space. He then operated out of Hong Kong and moved the main team to Tokyo, but both those places issued warnings for operating in the country without a license. Looking for a new place to call home, CZ and Binance decided to settle in Malta. Here, one of their goals is to obtain the ability to function as an exchange that legally accepts fiat.
Publicly, Binance has begun working with the Maltese government on two different projects. The first is a charity project with the President’s Trust aimed at using blockchain to help verify and secure charity work. The transparency blockchain provides will allow people to be certain where their donations go and who is contributing time to different organizations.
The second project Binance is working on is with MSX and the German-based “blockchain based equity fundraising platform” Neufund to create the first fully-regulated decentralized bank. Founders Bank, as it’s called, will not be controlled by a single entity, but rather by the community who participates in its Equity Token Offering (ETO). Neufund’s role will be to help raise money through the ETO where they “allow securities to be issued as a token on blockchain.” The vision of Founders Bank is to be the future of the banking industry, where cryptocurrency and traditional finance are merged into one.
OKEx
With Hong Kong making it difficult to get a license for fiat to cryptocurrency transactions, OKEx announced plans for leaving the country for Malta like Binance and Bitfinex did prior.
In partnership with the MSX, the fintech branch of the Malta Stock Exchange, plans for a new trading platform called OKMSX is under development with focus on institutional grade security tokens. In this collaboration, they hope to leverage both OKEx’s experience as a digital asset exchange and MSX’s experience as a regulated exchange. Many projects similar to OKEx have had to fight for regulatory approval around the world, but for OKMSX, they have the full support of the government.
BitBay
BitBay is a cryptocurrency exchange based out of Poland and began its move out of the country earlier this year due to an increasingly unfriendly environment. In their official statement, BitBay said, “Unfortunately the last Polish bank ready to provide bank services undertook [a] unilateral decision to finish cooperation with BitBay.”
While they haven’t started any projects with Malta, they suspended their services in Poland and made the move out of the country.
Palladium
Palladium is a new blockchain startup that didn’t move to Malta, but instead established itself in the country due to the progressive policies. Working with the US-based Bittrex and e-sports betting company Unikrn, Palladium is creating a fully-regulated blockchain-based exchange focused on providing liquidity between different assets. They are also planning to fund the project by offering the world’s first Initial Convertible Coin Offering (ICCO), which gives investors the ability to convert their tokens into shares after three years.
In Conclusion
Malta has done its best to be friendly to blockchain companies and to encourage innovation. If this development keeps up and more companies make Malta their new home, perhaps the “Blockchain Island” will live up to the name and present a modern space similar to what we’ve seen in today’s Silicon Valley.
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