Malta: An Island Stronghold for Crypto in the E.U.
As is well known, Malta is the latest country in Europe to frame itself as a haven for cryptocurrencies. The Chinese-founded exchange platform Binance is one company that has decided to open a HQ there. Hopefully this gateway shall lead to a stable trading pair of Euro/Crypto in future and outward rippling benefits for the E.U., of which Malta is in many ways a unique member, and for the global crypto economy.
Crypto is a space with big ideas that keep getting bigger. Not just eye-watering amounts of investment and exchange, but complex matters of law, personal freedom and safety and how to regulate the digital side of life in general. Malta’s issuing of regulations and appointment of an authority (Malta Digital Innovation Authority, in February of this year) are in some ways redolent of Switzerland’s FINMA and Digital Innovation Authority, but actually include more stipulations. The Virtual Financial Assets Act looks at wallets, advisors, whitepapers and each element of the process of beginning a compliant crypto-related entity.
As we know, blockchain is potentially highly inclusive. In theory all one needs as an individual to enter the cryptoeconomy right now is a connection to the Internet and time enough to get educated and make one’s interaction with it as safe as possible. Security for individuals and for big players like exchanges companies is still a vexed issue.
On the question of localization of involvement, making the biggest waves in terms of consensus infrastructure are the big regional digital economic areas, Silicon Valley, Eastern Europe & Russia, East Asia & China. Check out the contributing nodes for the biggest blockchains and how they are distributed.
This shades into a question: How much centralization and regulation should participants expect or accept? What of smaller countries and individual players? Will nationalized blockchains and institutional investors crowd these out?
Binance’s main platform, as with most others, is of course a centralized one. While it plans to make a decentralized platform, it is the centralized one that has secured the profits allowing it the freedom to switch countries rapidly to find the best regulatory situation, as with others that have moved multiple times, such as Kraken.
Malta will also help to bolster the trend of smaller countries in Europe stepping to the challenge of crypto. This article by SmartValor CEO Olga Feldmeier, whom I spoke with earlier this Summer, lionizes the phenomenon while making the argument for the preferable position of Switzerland and Zug valley. Switzerland’s exceptional nature is part of the reason it is not in the E.U., of course, and having a Eurozone member like Malta bring crypto closer to fiat will enable more ordinary Europeans to take advantage than before.
I see the initiative taken by Malta as evidence of balancing polarities. We must accept areas of concentration (centralization) within the crypto world.
We can see in the spread of crypto the emergence of different polarities all the time: First, the ASIC and mining dominance in China balanced the development concentration in America, then the engaged but experimental outlook of Estonia and Lithuania in the E.U. and Switzerland which helped to counterbalance the relatively flip-flopping regulatory moves in Asia… and now an island haven for crypto gateways has opened in the Mediterranean. Malta, home to the only Arabic language in the world written in Roman script, centered on the E.U.’s tiniest capital city (Valletta) has attracted the largest per-volume exchange platform, as well as Tron and crypto payment company Monaco. This looks to give a greater sense of global equilibrium. It brings the East closer to the European West and further lights the way for sovereign states to develop proactive regulation and make their economies fertile territory for the evolutionary explosion that crypto surely is.
