The Government of Malta proposes three legislative steps intended to achieve Malta’s vision of becoming the ‘Blockchain Island’. The three steps are summarized below:
1. The Digital Innovation Authority (Authority)
An Authority will be set up which will be responsible for promoting governmental policies which support the development of Malta in establishing itself as a hub for innovative technologies. The Authority will also act as a consultative body to other national competent authorities in regard to matters falling within their scope.
2. Bill Regulating Technology Arrangement and Technology Service Providers (TAS Bill)
The TAS Bill will initially capture DLT platforms and smart contracts only. The Government’s intention is to later extend the TAS Bill to capture other platforms and technologies, such as Artificial Intelligence and Internet of Things technologies.
Under the TAS Bill, certification of technology service providers will be executed on a voluntary basis. If a service provider is willing to become certified, the Authority will register the IT system auditors and/or administrators, certifying the technology of the service provider. By registering the trusted third party, it is hoped that overall trust between the Authority and the service provider is improved.
3. Bill Regulating Virtual Currencies and ICOs (VC Bill)
The VC Bill will set out a Financial Instrument Test which will be applicable to all issuers and persons participating in ICOs and VC activity and will enable entities to determine whether their VC, token or activity fall within the scope of existing financial services legislation. The VC Bill will also encompass legislation regulating ICOs and service providers offering VC related activities which fall outside of the scope of existing legislation.
These proposed actions are intended to provide industry players with more certainty in the as yet unregulated DLT space, while ensuring market integrity, market stability and investor protection within this sector.
The proposals are open for consultation until the 9th March 2018. The consultation document can be accessed here: http://opm.gov.mt/en/Documents/FSDEI%20-%20DLT%20Regulation%20Document.pdf
