Crypto Companies Reportedly Unable to Set up on ‘Blockchain Island’ Malta

Maltese banks are unwilling to grant bank accounts to many blockchain-focused companies, in spite of the island’s semi-official moniker as “Blockchain Island,” reports the Times of Malta (the Times).

After contacting many of these companies and businesses, the Times found that many banks found them to be too risky. Notably, the banks are apparently drawing a sharp distinction between firms involved with “cryptocurrency,” and those involved with “blockchain.”

In response to the rejections, Parliamentary Secretary for Financial Services Silvio Schembri is doing outreach with banks in order to foster “a better understanding of the [blockchain-cryptoasset] industry” among reluctant banks. Schembri said that Maltese banks prefer to wait until applicants get approval from the tiny country’s financial watchdog, the Malta Financial Services Authority (MFSA).

The attitude of Maltese banks toward the cryptoasset industry certainly looks out of sync with its PR campaign trumpeted during 2018, above all by the country’s Prime Minister Joseph Muscat - who very notably plugged the country’s crypto affinity on the floor of the United Nations general assembly, back in late 2018.

A Slow 2019

As the hype of crypto has dwindled along with prices during 2018, Malta has in turn been perhaps less active and vocal in propagating its development during the new year.

The political opposition leader to Muscat and critic of digital currencies, Adrian Delia, criticized the government in January for being “completely silent” about crypto during the holiday. In addition, the MFSA recently warned its citizens away from getting drawn into crypto scams - adding that no entity had yet been authorized under the country’s 2018 Virtual Financial Assets Act regime.

However, CryptoGlobe recently reported that Malta would, within two years, be storing all its educational certificates on a blockchain. Muscat said that this measure would “minimise [sic] bureaucracy and provided greater security for students’ private data.”