Regarding crypto regulations, Malta has positioned itself well and taken a progressive approach to cryptocurrency regulation. Since it is considered a global leader in cryptocurrency regulation, blockchain companies and digital currencies are a booming sector in Malta. It is one of the places around the world where innovation in blockchain technology and cryptocurrencies thrive. Thanks to its efforts to foster industrial growth through cryptocurrency regulations, the Mediterranean island has earned itself the nickname ‘the blockchain island.’
Current Maltese cryptocurrency regulation
Although cryptocurrencies are not legal tender in Malta, the authorities acknowledge them as a unit of account, unit of exchange or value store. No tax regulation controls cryptocurrencies, and VAT does not apply to transactions involving fiat currency for crypto. Cryptocurrency exchanges are legal in Malta. In 2018, the Maltese central government launched landmark legislation to clarify a new regulatory blueprint for cryptocurrencies. The legislation involved three bills that set a regulatory regime for crypto exchanges, wallet providers, asset managers, ICOs, and brokers. That would see Malta set a global precedent in crypto regulations. The three bills included the: Malta Digital Innovation Act (MDIA), Innovative Technology Arrangement and Services Act (ITAS), and the Virtual Financial Assets Act (VFAA).
The laws require every cryptocurrency company setting up in Malta to acquire licensed certifications. That means the existing and new blockchain technology-based activity is subject to monitoring by the governmental agencies’ regulation. That is advantageous to cryptocurrency investors and users because there is a reduced risk of ICO fraud. That follows the fact that crypto service providers must keep traceability records that allow regulatory authorities to access the team member’s location and also the ability to enforce restrictive orders on their fund accounts.
As a result of the clear cryptocurrency regulations, the Maltese government does not consider using digital currencies illegal or unregulated on its own. Although there have been heated debates in informative platforms such as Karl Schranz about the role of cryptocurrency regulations in the crypto industry, Maltese crypto regulations are an excellent example of how smart regulations can positively impact the industry and a country’s economy at large. The World Economic Forum suggests that regulations play an essential role in economic growth since they protect investors and promote healthy competition. For instance, when regulations are set up by large markets such as the EU, economies scale quickly.
The flourishing Maltese economy
Due to its innovative and progressive legislation of virtual currencies, the blockchain island has attracted big names in the cryptocurrency market to its shores, including exchanges that seek a more regulatory approach. In simple words, cryptocurrency-related markets and businesses continue to flock to Malta because of its well-specified procedures on how cryptocurrencies can be used in the country. For every blockchain-based company established in Malta, new job opportunities come into being, fostering substantial economic growth in the country. Furthermore, blockchain technology has innovations apart from cryptocurrencies pushing Malta at the forefront of such developments.
The final words
Although Malta is a small country, it has proven to be a case study to other world crypto leaders to impact cryptocurrency regulations positively. It is the leading destination for cryptocurrency companies that seek a haven for regulatory protection, which has resulted in economic growth that the global crypto industry can emulate.