As the cryptocurrencies movement speeds through its second year of significant adoption, government regulation is attaining a lot of attention.
It’s easy to see why.
Despite the decentralized ethos that pervades crypto-culture, digital currencies are uniquely susceptible to the whims and reactions of different central governments. Governmental action and inaction have both shaped cryptocurrency proliferation in several ways.
For instance, when China placed an outright ban on ICOs, Japan and South Korea, two countries with significantly small populations than China, became two of the most prolific countries for cryptocurrency adoption and ICO investment.
At the same time, the regulatory uncertainty posited by the U.S. government continually roils markets as investors try to read the tea leaves to determine the government’s stance on digital currencies.
However, this influence isn’t a one-way street. The cryptocurrency and blockchain movements are shaping governments as well. Now, some countries are vying to become the crypto capital of the world, and Malta, the European island centered between Italy and Tunisia, is making a strong case to attain this title.
Malta’s Big Moves
This summer, Malta passed a trio of laws that make it easier for companies to issue and trade new digital currencies. Malta has a population of less than half a million people, but the government is pushing cryptocurrencies and blockchain initiatives as a job-creating tech boom for the island.
In the wake of the law’s passage, Chetcuti Cauchi Advocates, a business and financial advisory firm on the island, expressed optimism about the moves. In a message on the company’s website, the firm explained,
"Malta will become the first jurisdiction in the world to have laws which comprehensively cover the treatment of cryptocurrencies, the launch of initial coin offerings and subsequent treatment of assets offered to investors as well blockchain/DLT service providers and services which they offer, including the setting up of cryptocurrency exchanges.”
The moves appear to be mostly successful. Several prominent cryptocurrency exchanges including Binance, OKEx, and DQR opened offices on the island.
All of this attention is leading many to dub Malta the world’s blockchain capital, a title the island seems happy to embrace.
Another Exchanges Joins the Ranks
Another prominent cryptocurrency exchange, ZB.com, announced that it was setting up shop on the island.
According to the company’s official press release, the exchange will launch in September with support from Malta’s banks, while opening the exchanges to European markets.
In a congratulatory Tweet, Malta’s Jr Minister for Financial Services, Silvio Schembri, said that he expects the exchange to invest $20 million in the first three years and to create more than 150 jobs.
The company’s co-founder, Jimmy Zhao, was effusive in his support for Malta’s stance on blockchain technology, commenting,
“Malta is perhaps the world’s most progressive and forward-thinking nation in DLT, crypto and fintech, and we are very excited to be part of the Blockchain Island. We are confident we will be able to announce our live operations soon.”
Initially, the exchange will only conduct crypto to crypto exchanges, but it’s reported that the exchange intends to develop fiat to crypto functionality in the future. Moreover, the exchange does not offer a digital token of its own.
Malta’s stance on blockchain technology and many companies’ willingness to move their operations to the island reflects the growing frustration over the regulatory uncertainty that plagues many countries. However, it also represents the forward progress of blockchain technology in that some countries are enthusiastically throwing open their doors, not wanting to miss out on the technological revolution that many consider the third iteration of the internet.
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