Yesterday, The Maltese Cabinet approved three bills which were also presented to Parliament for its first reading: the Malta Digital Innovation Authority Bill, the Technology Arrangements and Services Bill and the Virtual Financial Assets Bill.
The proposed bills seek to provide regulation and legal certainty for users of cryptocurrencies and Distributed Ledger Technology (DLT), such as blockchain, in a market which is currently unregulated.
The Malta Digital Innovation Authority Bill
The first bill presented would create a Malta Digital Innovation Authority, which would have various roles. One of its key functions would be to certify DLT platforms, such as blockchain, providing legal certainty for their users. Certified surveyors within the authority would verify that information being logged on the platform, such as transfers of currency to individuals or companies, is genuine. This would provide legal certainty and establish trust in the system, and also eliminate the need for middlemen such as banks, thus making operations more efficient.
The Technology Arrangements and Services Bill
The second bill proposes establishing a system for the registration of Technology Service Providers and the certification of Technology Arrangements through system administrators and system auditors.
The Virtual Financial Assets Bill
Finally, the Virtual Financial Assets Bill would lay out a framework for Initial Coin Offerings (ICOs) and regulations regarding the provision of services in relation to virtual currencies.
The intermediaries subject to the virtual currency Bill include brokers, exchanges, wallet providers, asset managers, investment advisors and market makers dealing in virtual currencies (to be issued by the MFSA).
Parliamentary Secretary, Hon. Silvio Schembri, commented on the overwhelming response and constructive feedback that has been received both from interested companies as well as international regulators.
After the Bills are presented to Parliament for the first reading, both sides of the House will debate before they are passed into law.