In late 2018, Malta pioneered world-first legislation in blockchain and cryptocurrencies, providing one of the broadest legal and regulatory frameworks to support the growth of this new sector, attracting an influx of blockchain companies to Malta.
According to JP Fabri, block-chain specialist, economist and Director at the ARQ Group, Malta has set global standards that allow for market integrity, investor protection and inclusivity within a tech-friendly environment. The inclusivity of blockchain incorporates people outside the traditional financial systems.
As one of the EU’s fastest growing economies, Malta has carved out an economic niche in remote gaming, aviation, maritime services and pharmaceuticals, built on a robust, EU-compliant legal and regulatory framework that provides stability and security to investors, backed by easy access to a single EU market.
‘Malta has established itself as the remote gaming capital of Europe, with the iGaming sector booming and and worth a whopping $1.4 billion, 12% of Malta’s GDP,’ said Fabri. ‘As a global economic centre, Malta has always attracted wealth and pioneers in different industries,’ he said.
Speaking ahead of the BlockChain Africa Conference 2019, Fabri said Malta continued with its tradition of regulation and jurisdiction. A sandbox creates an innovative playground for regulators and investors to experiment with blockchain and cryptocurrency. ‘As one of the emerging sectors in the Maltese economy, the government is paving the way to establish the ‘Blockchain Island’ by enacting laws that offer comprehensive legal and regulatory coverage of blockchain technologies and cryptocurrencies.’
‘Malta adopted a progressive stance on cryptocurrency.’ He added the ground-breaking legislation also enables the classification of a virtual currency, or ICO, to be certified in Malta. ‘The Malta Financial Services Authority has issued standard conditions for Professional Investment Funds that want to invest in virtual currencies,’ said Fabri.
‘Blockchain can support social inclusivity and the technology can bring about efficiencies and cost reductions that are nothing short of a financial revolution,’ said Fabri in comments prior to the conference in Johannesburg.
Fabri recently presented a paper at The Commonwealth Secretariat on how blockchain can bring tangible benefits and support disaster risk reduction in line with the UN Sendai Framework and also support public services by improving the delivery and effectiveness of services leading to a deepening of democracy.
‘Unfortunately cryptocurrency has been the focus and got bad press, whereas blockchain is positioned to revolutionise the world by giving tangible benefit to citizens such as during elections.’
‘Blockchain offers a layer of trust above transactions and is perfect when the trust element can be guaranteed, such as elections, or the purchasing of property and vehicles. In Georgia it takes 10minutes to change ownership of a house with the use of blockchain,’ he said.
When asked about the relationship between Malta and South Africa, Fabri said that Malta is ideal as a business relocation and co-location for South African companies, especially those seeking entry into the European market. ‘Malta is increasingly becoming an attractive option for investment and/or immigration for a number of South Africans, driven by a strong and stable economy and a relatively low cost of investment, English speaking, easy access to Europe at a fraction of the cost of Luxenbourg, with a lower tax rate, plus access to a European and Schengen area passport programme. Malta is fast-establishing itself as a financial services and fintech hub and the latest strategies launched by the authorities further add to the attractiveness of the island.’
Malta’s Individual Investor Programme (IIP) is rated as the world’s top-ranking Citizenship by Investment (CBI) programme for each of the past four years, and rates the Maltese passport as the joint-seventh most powerful globally. Malta also ranked highly in Professional Wealth Management’s 2018 CBI Index for its due diligence and freedom of movement.