Current developments in crypto currencies and the blockchain on Malta

On the sun­ny Mediter­ranean island of Mal­ta, every­thing revolves around blockchain tech­nol­o­gy. Before the Mal­ta AI & Blockchain Sum­mit takes place in a few weeks, the Mal­tese gov­ern­ment is mak­ing head­lines with the announce­ment of sev­er­al excit­ing blockchain ini­tia­tives. At the same time, a sep­a­rate bank is being set up to con­cen­trate on financ­ing blockchain and cryp­to start-ups.

We have com­piled the lat­est devel­op­ments around cryp­to cur­ren­cies and blockchain on the Block­hain Island Mal­ta below.

Malta puts Registry of Companies on the blockchain

Malta’s busi­ness reg­istry Reg­istry of Com­pa­nies will soon be con­trolled and man­aged through the blockchain. Sil­vio Schem­bri, Par­lia­men­tary Sec­re­tary for Digi­ti­sa­tion, made this sur­pris­ing announce­ment in an inter­view with the Mal­tese news­pa­per Mal­ta Inde­pen­dent.

The Mal­tese Reg­istry of Com­pa­nies con­tains entries and data on all com­pa­nies on the island, both cur­rent and past. Until the end of last year, it was a sub­di­vi­sion of the Mal­ta Finan­cial Ser­vices Author­i­ty (MFSA), but was then estab­lished as a sep­a­rate, legal­ly inde­pen­dent enti­ty for the pur­pose of spe­cial­i­sa­tion and effi­cien­cy improve­ments. In addi­tion, the move is also intend­ed to strength­en the inter­nal man­age­ment struc­tures of the organ­i­sa­tion.

Schem­bri states in the inter­view that the entire IT infra­struc­ture of the Reg­istry of Com­pa­nies will be revised and updat­ed, result­ing in more effi­cient and less bureau­crat­ic process­es. Even more excit­ing, how­ev­er, is what fol­lows “The new sys­tem will make the pro­vi­sion of new ser­vices which with the present sys­tem are not being pro­vid­ed, bring­ing the agency the first in the world to be run on a blockchain based sys­tem.”

Unfor­tu­nate­ly, Schem­bri does not go into more detail about which new ser­vices the com­pa­ny reg­is­ter would offer, or how the blockchain infra­struc­ture will be set up or on which solu­tion it will be based. How­ev­er, we are curi­ous and assume that these details will be made pub­lic soon.

The Mal­tese government’s efforts to use blockchain tech­nol­o­gy are well known. They go far beyond the posi­tion­ing of Mal­ta as Blockchain Island and an opti­mal loca­tion for the set­tle­ment of Blockchain com­pa­nies.

It also wants to lead the way as an author­i­ty with a pos­i­tive exam­ple and real­ize the high poten­tial ben­e­fits of this inno­v­a­tive tech­nol­o­gy. The blockchain-con­trolled busi­ness reg­is­ter is just anoth­er mea­sure.

A few months ago, Par­lia­ment Sec­re­tary Schem­bri announced that all uni­ver­si­ty cer­tifi­cates issued by pub­lic uni­ver­si­ties would in future be issued via the blockchain. This should pre­vent doc­u­ment forgery and, above all, help employ­ers who can rely on the authen­tic­i­ty of their appli­cants’ data.

Blockchain Campus near Gzira ceremonially opened

On the occa­sion of the open­ing of a new blockchain cam­pus in Gzi­ra with a size of almost 2000m², Prime Min­is­ter Joseph Mus­cat also endeav­oured to empha­sise its impor­tance for the blockchain island Mal­ta.

The cam­pus in Gzi­ra bears the full name “Chiliz Blockchain Cam­pus”, named after its spon­sor, the Blockchain Start-up Chiliz. Chiliz is devel­op­ing a fan token plat­form for soc­cer clubs and has already signed col­lab­o­ra­tions with pres­ti­gious clubs such as Juven­tus Turin, Paris Saint Ger­main and West Ham.

Not only the com­pa­ny, which has already grown to 50 employ­ees, but also oth­er blockchain start-ups and com­pa­nies, includ­ing cryp­to-exchanges and ser­vice providers, will have their office space on the site.

Mus­cat of course also took the oppor­tu­ni­ty to under­line the pio­neer­ing role of his gov­ern­ment. He sees his gov­ern­ment not only as a pio­neer and sup­port­er of invest­ments in intan­gi­ble assets, but also believes there to be a direct link between this active role and Malta’s high eco­nom­ic growth, which far out­strips all oth­er EU coun­tries.

Sil­vio Schem­bri also spoke and praised the cam­pus as a fur­ther sign of Malta’s com­mit­ment and suc­cess as a top inter­na­tion­al loca­tion for blockchain com­pa­nies. He con­clud­ed with an urgent appeal to local banks to face up to tech­no­log­i­cal inno­va­tions and sup­port local start-ups by grant­i­ng loans. His exact choice of words was that banks should “step up their game, adopt and adapt to this ever-chang­ing sce­nario.”

Malta proposes to pursue refugee applications by blockchain

Anoth­er blockchain ini­tia­tive by the Mal­tese gov­ern­ment is mak­ing head­lines. Accord­ing to a report by the EU Com­mis­sion, Mal­ta is con­sid­er­ing using block-chain tech­nol­o­gy to track social aid appli­ca­tions by asy­lum seek­ers.

The report enti­tled “Blockchain for Dig­i­tal Gov­ern­ment” presents — among oth­er things — Mal­ta as a pio­neer in the use of blockchain in pub­lic ser­vices. The exten­sion of a pilot project from 2017, which test­ed the issu­ing of edu­ca­tion­al cer­tifi­cates via Blockchain — and which has mean­while been estab­lished as a stan­dard — is used as a start­ing point.

The report shows that blockchain tech­nol­o­gy could be used to ver­i­fy iden­ti­ty and record infor­ma­tion on the receipt of social aid in oth­er EU coun­tries.

How­ev­er, it is also crit­i­cal­ly not­ed that there are still numer­ous ques­tions regard­ing the legal­i­ty of the issuance and ver­i­fi­ca­tion of cer­tifi­cates via the blockchain. This is a big obsta­cle to their adop­tion. Since this use case would involve an EU-wide effort, it would prob­a­bly make lit­tle sense for Mal­ta to take the ini­tia­tive and move for­ward as long as it is unclear whether oth­er coun­tries would jump on the band­wag­on.

Founders Bank to provide Malta’s crypto start-ups with liquidity

Anoth­er excit­ing devel­op­ment for Malta’s blockchain ecosys­tem is the cre­ation of Founders Bank, which will focus exclu­sive­ly on financ­ing cryp­to and blockchain start-ups and cryp­to exchanges. Their neces­si­ty stems from the fact that tra­di­tion­al banks have so far been reluc­tant to pro­vide these com­pa­nies with loans (hence the Schem­bris appeal at the open­ing of the Blockchain cam­pus).

Founders Bank was found­ed in Mal­ta at the begin­ning of 2018 and is financed by Binance, the world’s largest cryp­to exchange. Also known as “Cryp­to Bank”, the bank is designed in such a way that mar­ket par­tic­i­pants can also become co-own­ers of the bank.

It should apply block-chain-com­pli­ant gov­er­nance mod­els based on Smart Con­tracts and be man­aged par­tic­u­lar­ly effi­cient­ly. It should be not­ed that the bank is cur­rent­ly apply­ing to MFSA for a Mal­tese bank­ing licence (it has not yet been issued). The head­lines this week were about Kenan Altu­nis, a for­mer senior man­ag­er of Deutsche Bank, join­ing Founders Bank as CEO.

About Dr. Jörg Werner

Dr. jur. Jörg Wern­er, born 27 May 1971, attend­ed the law school of the Uni­ver­si­ty of Leipzig and passed his first state exam­i­na­tion in the State of Sax­ony in 1996. After suc­cess­ful­ly com­plet­ing his manda­to­ry legal intern­ship, he suc­cess­ful­ly passed the sec­ond state exam­i­na­tion of the State of Sax­ony-Anhalt in 1998 and was admit­ted to the bar and began to prac­tice as a Ger­man attor­ney (Recht­san­walt) before the court of Magde­burg the same year. He worked as an attor­ney at the Law Offices of Prof. Dr. Fre­und & Kol­le­gen until he formed the firm of Wrede & Wern­er. He was also admit­ted to prac­tice before the Supe­ri­or Court of Naum­burg. In 2001, he moved the firm’s offices to Cen­tral Berlin, where he was admit­ted to prac­tice before the Courts of Berlin. Dr. jur. Jörg Wern­er then com­plet­ed his doc­tor­al stud­ies at the Uni­ver­si­ty of Ham­burg and grad­u­at­ed as a Dok­tor der Rechtswis­senschaften (Doc­tor of Laws).

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