The country has developed different projects related to Distributed Ledger Technology. It is recognized as a “blockchain island” and its path just begins
Malta, a small country located in a European island, continues to expand its reputation as a “blockchain island”, thanks to its regulatory environment friendly with the technology that drives cryptocurrencies.
In early April, Malta’s Financial Services Authority (MFSA) granted licenses to 14 cryptocurrency agents in order to promote the growth of this sector. This time, the country will become the first one, in the whole world, to have a government agency based on blockchain technology for business registration.
According to a report by The Independent of Malta, The Maltese Registry of Companies has official data and documents related to new and existing companies; including businesses. At the end of 2018, this registry was separated from the MFSA and established as an independent entity. At that time, it was told that the agency must comply with all the obligations it had when it was part of the MFSA.
Although there was not much information regarding the changes that would be applied in the entity, some of these changes were announced recently. One of them is the implementation of blockchain technology, which is one of the most interesting modifications that the new government department will apply.
This week, Silvio Schembri, Parliamentary Secretary for Financial Services, Digital Economy and Innovation, visited the new installation of the agency in Zejtun. He assured that the creation of this independent registry responds to the modifications proposed by the MFSA.
The main objectives of this new blockchain projects are to avoid bureaucracy, streamline processes and strengthen the governance structure. In this sense, Schembri explained that, with the new system, the Authority will be able to focus exclusively on its regulatory functions.
After the separation of the registry from MFSA, there was an investment in a new blockchain system to update the entire registry and offer speed, efficiency and security so that entrepreneurs have a better ease of use when they start.
“The new system will make it possible to offer new services that are not being provided with the current system. This makes the agency the first in the world to operate with a blockchain-based system”, Schembri said.
Joseph Farrugia, Senior Manager of MFSA, said that the new facilities will strengthen the operations of the agency, so that it can overcome its new challenges. According to the official, these changes will also make it possible to offer a better service to customers and operators.
Among the benefits of blockchain technology, it stands out that, since the information stored on the platform cannot be modified without leaving traces, legal security is increased for small, medium and large companies. In addition, it facilitates information management in general and reduces the time needed to create a new company.
The adoption of blockchain technology also takes place very close to Malta. In December, about seven countries of the European Union (EU) made a statement in which they promoted the use of Distributed Ledger technology (DLT) to improve the management of public services. The idea is to apply that kind of technology in sectors, inter alia, such as transport, customs offices, business registration, healthcare.
Later, in January, a mission of the International Monetary Fund (IMF) considered that using blockchain technology in Malta had created significant risks of money laundering and financing of terrorism in the island’s economy. Among its recommendations, the IMF said that the authorities would have to apply more sanctions and improve their understanding of the possible risks and breaches of the rules.
But the Prime Minister of Malta, Joseph Muscat, argued that DLT will transform the range of political, civic and corporate systems. Its potential to solve old problems led the country to be known as a blockchain island, he said, claiming that the island was the first jurisdiction in the world to regulate this technology.
On the other hand, China is already working on the implementation of blockchain in the courts, whilst countries such as Argentina, Brazil, and Canada conducted commercial exchanges thanks to blockchain technology. With these advances, the present and future of the world in fields such as health and economics are based on this new technology.
By María Rodríguez