The Cabinet of Malta approved three bills related to cryptocurrency and blockchain technology. One bill in particular, the Virtual Financial Assets Bill, provides a regulatory framework for cryptocurrencies and initial coin offerings.
The Cabinet of Malta approved three bills on Tuesday one of which is the Virtual Financial Assets Bill that provides the regulatory framework for cryptocurrencies and initial coin offerings (ICOs), according to the local media. The other two bills are the Malta Digital Innovation Authority Bill and the Technology Arrangements and Services Bill.
All three were also presented to the Parliament of Malta for it’s reading on Tuesday. The next debate between the sides of the House before they are passed into law, the Malta Independent explained. The news outlet also noted that Parliamentary Secretary for Financial Services, Digital Economy and Innovation, Silvio Schembri “strongly believes”:
Once new laws surrounding blockchain technology and cryptocurrency are enacted in Malta banks would be less reluctant to welcome companies working within the industry, presumably due to the legal certainty it would provide.
“As a government we think that by regulating this market it will ensure that the three main principles of financial regulation are adhered to and will thus be a market that protects the investor and provides market integrity and financial soundness.”
About the Three Bills
The Malta Digital Innovation Authority Bill establishes a new department named the Malta Digital Innovation Authority along with its duties and responsibilities. It also focuses on internal governance arrangements, explained Mamo TCV Advocates law firm. One of the key roles of the Authority is “the certification of DLT [Distributed Ledger Technology] platforms to promise credibility and provide legal certainty to users wishing to make use of a DLT platform.”
The second piece of legislation, titled the Technology Arrangements and Services Bill, deals with the registration of tech service providers and the certification of tech arrangements, such as concerning system admins and auditors.
The Virtual Financial Assets Bill, the law firm described, focuses on ICOs “and the regulation in respect of certain service providers which will be involved in activities related to ICOs.” The firm added that “The bill will also outline the regulatory regime which will be applicable to cryptocurrency exchanges,” noting:
Malta has witnessed an explosive interest from exchanges seeking to relocate to Malta and issuers of ICOs wishing to launch from Malta. The proposed bill will further strengthen Malta’s position on the DLT front and thus solidify its rep as a blockchain island.
More so, the bill empowers the Malta Financial Services Authority (MFSA) “with the necessary regulatory and investigatory powers” like “the powers to issue directives, to adopt and publish rules, to require info…[and] to suspend either an ICO or the trading of a VC on an exchange.”