Malta's Prime Minister Calls Cryptocurrencies 'Inevitable Future of Money'

Siamak Masnavi

In a recent interview with Bloomberg, Malta's Prime Minister, Joseph Muscat, said that he believes cryptocurrencies are "the inevitable future of money."

Although Malta (or, "The Republic of Malta", to give it its official name) is a small island nation in the European Union and traditionally best known to Europeans as a nice place for a relaxing beach holiday, lately, it has been making a name for itself as a crypto-friendly place, and it seems to be working hard to firmly establish itself as a major capital in the cryptocurrency world.

On 23 March 2018, Binance, the world's largest cryptocurrency exchange (by traded value), which was founded last year in China and currently headquartered in Hong Kong, shocked the crypto world when it announced that it was planning to move to Malta due to Malta's "existing pro-blockchain legislation" and "the stability that it offers financial technology companies through its regulatory framework."

Apparently, Binance founder and CEO, Zhao Changpeng, appreciated the vision of the country's leadership and its plans for a clear and healthy regulatory framework: 

We were impressed by the logical, clear and forward thinking nature of Malta’s leadership. After reviewing a proposal bill, we are convinced that Malta will be the next hotbed for innovative blockchain companies, and a centre of the blockchain ecosystem in Europe. Binance is committed to lending our expertise to help shape a healthy regulatory framework as well as providing funds for other blockchain start-ups to grow the industry further in Malta.

Zhao Changpeng, Binance CEO

An example of the kind of steps the Maltese government is taking in this area came on 16 February 2018, when The Malta Independent reported on plans for creation of a new agency called the Malta Digital Innovation Authority, the purpose of which (alongside other regulation) was to "provide legal certainty in the sphere of Blockchain technology and by extension cryptocurrencies."

Binance's announcement also noted that the government was "in the process of formalizing a ‘Virtual Currency Act’ that will pave the way for a first-of-its-kind auditing framework made specifically to regulate blockchain-driven investment operations such as token sales."

Upon hearing the news, Malta's Palimentary Secretary for the Digital Economy, Hon. Silvio Schembri, made these comments:

This is a clear vote of confidence in our country and the work being done in this sector, mainly by the latest policy launched to offer a regulatory framework of DLT operations... It is obvious that Malta has become a natural point of reference on the international sphere and companies such as Binance will continue to look into Malta to further expand their operations or establish a base.

Hon. Silvio Schembri

He added that:

Binance’s presence in Malta sustains our vision, that of making Malta ‘The Blockchain Island’.

Hon. Silvio Schembri

On the day of the announcement, Malta's prime minister, Joseph Muscat, was also quick to welcome Binance:

 

The Binance CEO acknowledged this welcome and made his own invitation to other crypto businesses to move to Malta:

Two days after Binance's announcement, Justin Sun, founder of TRON (a blockchain-based operating system) and CEO of Tron Foundation, said on Twitter that TRON was also considering investing and operating in Malta:

Binance's vote of confidence in Malta must have also played a major part in the decision of another digital asset exchange, OKEx, which is based in Belize, to expand operations to Malta. On 12 April 2018, OKEx announced on their website that it was also confident of the approach taken by the Maltese government. It's CEO, Chris Lee, made the following comment:

We look forward to working with the Malta government as it is forward thinking and shares many of our same values: the most important of which are protection of traders and the general public, compliance with Anti Money Laundering and Know Your Customer standards, and recognition of the innovation and importance of continued development in the Blockchain ecosystem.

Chris Lee, OKEx CEO

According to Tim Byun, Chief Risk Officer and Head of Government Relations of OKEx:

Malta’s Virtual Financial Asset Act is a solid foundation for the industry and the government to work together in fostering the nascent blockchain/digital asset industry. More specifically, Malta’s sound risk-based approach will help cultivate a responsible, compliant, and healthy ecosystem.

Tim Byun, Chief Risk Officer of OKEx

Finally, it is worth noting that in November Malta will be hosting one of the largest blockchain events in Europe this year: Malta Blockchain Summit. This should bring even more attention to the "Blockchain Island".