Speaking at the 73rd UN General Assembly in New York at the end of September, Maltese Prime Minister Joseph Muscat sparked a sensation in the blockchain scene. In his speech, he addressed, among other topics of world politics, the importance of global cooperation in the exploration of and research into innovative technologies such as the Blockchain and Distributed Ledger Technologies. He praised the future potential of this still young technology and explained why the island state was the first country in the world to opt for an official, legal framework around it. It was a particularly striking statement he made in the same speech however, that dominated the headlines in particular.
Cryptocurrencies as the ”inevitable future of money”
In his 17-minute speech to the UN General Assembly, Muscat spoke on a wide range of topics including the threat of increasing isolation and emerging nationalisms, possible trade conflicts and the impact of climate change before pointing out the great potential and opportunities of modern technologies. He stressed the tremendous possibilities of the digital age and the need to approach them with an open attitude and a global discourse.
As an example, he mentioned that Malta was the first country in the world to create a legal framework around the topic of blockchain/distriuted ledger technologies. Thus, legal certainy had been created for an industry that had previously only existed in a “legal vacuum”.
Blockchain is the fundamental technology underlying crypto currencies, which would be the ” inevitable future of money “. He further explained that crypto currencies create more transparency and thus help to distinguish between bad and good companies.
Muscat Highlights Further Benefits of DLT Technology
Muscat then went on to discuss other opportunities created by Blockchain and Distributed Ledger Technology. For example, he mentioned other examples of healthcare systems where patients could have full control over their medical data and talked about how emissions trading could be taken to the next level.
It would be possible to check whether humanitarian aid actually reaches its intended destination. Thanks to DLT, it could be ensured that users won’t lose access to their legitimate property as a result of compromised data.
But the technology also has far-reaching implications for businesses and government agencies. Companies could demonstrate more responsibility and accountability to their shareholders, while states are adjusting from hoarding data about their citizens to regulating an environment in which citizens entrust the state with the handling of their own data.
Why Crypto/Blockchain Matters to Malta
Blockchain technology and crypto currencies in particular are very important for the small Mediterranean island. Malta has already enjoyed a reputation as an important and innovative financial location. For this reason, the government recognized the huge opportunity in time and has started to position itself as the “Blockchain-Island”.
In the sense of Muscat’s phrasing of crypto currencies as the “inevitable future of money”, Malta’s government wants to make the country the most attractive and innovative location for the underlying blockchain industry.
In addition to safeguarding Malta’s reputation as the most progressive financial location in the Mediterranean, it is expected that the establishment of innovative start-ups and blockchain companies will also enable the country to take advantage of the growing market. Advantages include the creation of new jobs, additional tax revenues through the settlement and growth of successful blockchain start-ups and, of course, the development of industry-specific know-how through attracting qualified staff and blockchain experts from all over the world.
And since Blockchain is still a very young technology, there is a global race to see which countries can establish themselves as key players in this industry. In competition with countries such as Switzerland, Liechtenstein, Estonia and Singapore, Malta has been able to come out on top thanks to its ambitious and forward-thinking government and the world’s first legal framework for DLT technology.
Malta Has Already Taken a Multitude Of Steps
In simple terms, Malta is the number 1 in terms of legislation regarding Blockchain and DLT technology. As we have already reported, 3 important legislative initiatives have been adopted by the government of the Blockchain Island, which put together form the legal framework mentioned above.
For example, the Virtual Financial Assets Act defined 4 different license classes for recognized DLT service providers and specified the role of VFA agents. With the Malta Digital Innovation Authority Act it was decided to introduce the special supervisory authority for Malta’s blockchain industry. The Innovative Technology Arrangements and Services Act defines regulations for the registration and licensing of technology providers in Malta, whereby aspects of DLT and Smart Contracts as well as crypto currency exchanges in particular are addressed.
But the efforts of the Maltese government go beyond the passing of laws. Another initiative was the co-organization and official sponsorship of the Blockchain Congress “Delta Summit” at the beginning of October. In addition to an impressive line-up of high-profile speakers such as Changpeng Zhao, CEO of the largest crypto exchange Binance or Roger Ver, founder of Bitcoin.com, Minister Silvio Schembri and Prime Minister Muscat did not miss the opportunity to speak at the conference.
So it comes as no surprise that Muscat used the media attention of the world stage at the UN General Assembly to address the future-oriented attitude of his government in the matter of Blockchain and to slightly drum up publicity for Blockchain Island.
It is clear: no other country within the EU (or worldwide) currently offers a more attractive and promising location for the foundation and establishment of a company with DLT technology. Founders benefit from a clear legal framework, the ability to have the DLT model reviewed and licensed by the state, and the confidence of (potential) investors.
If you are also interested in founding a DLT company and are considering to locate in Malta, then we will be happy to help you. Find out more about our comprehensive service and consulting services for blockchain and DLT or make an appointment to discuss the next steps in setting up your company on the island of Malta.