Malta’s efforts to become the first country to set up a comprehensive legislative infrastructure for virtual currencies and distributed ledger technology have moved up a notch. The three bills forming part of this infrastructure were approved unanimously by the parliament of Malta on the evening of 26 June 2018. This brings these three bills one step away from becoming law. The only outstanding step necessary is one more reading in parliament, and, if parliament approves once more, the bills will be signed into law by the President of Malta. Given that these bills enjoy unanimous cross-party support, it is expected that the final reading of these bills will obtain overwhelming parliamentary support and thus pass into law soon after.
The three bills in question are the Malta Digital Innovation Authority Act (MDIA), the Innovative Technology Arrangements and Services Act (TAS) and the Virtual Financial Assets Act (VFA). The role of the MDIA is to regulate, supervise, promote, and develop the sector, as well as to collaborate with other regulatory bodies and competent authorities to ensure that Malta is compliant with its obligations to prevent financial crime of all sorts. The MDIA will also collaborate with non-profit organisations and educational institutions. The TAS provides for the registration of Technology Service Providers as well as certification for individuals, and for Technology Arrangements. New technologies and individuals involved in these technologies will receive certification and recognistion from the Malta Digital Innovation Authority. The VFA regulates virtual financial assets, which may be financial instruments (such as security tokens) or electronic money (such as a cryptocurrencies), as well as related events and technologies. It also provides for the regulation of VFA exchanges, usually known as crypto-exchanges.
Malta’s three DLT bills are on the very cusp of passing into the law and, once this happens, Malta will be the first jurisdiction in the world to provide a friendly, supportive and fully regulated environment for all crypto and blockchain-related innovation and investment. Given that Malta is also part of the European Union, its new legislative infrastructure, will give all actors in this sector the peace of mind of acting in an legislative environment recognised and sanctioned by the largest single market in the world.