Human existance is marked by several instances which had a prolong and lasting impact. Electricity is one of them, so is the internet. Distributed Ledger Technology has the potential to be one of them. DLT is distinctively disruptive by nature, fitting perfectly in the notion of creative destruction. It is and will be changing the way we do business, the way we interact with each other, and may be the way we govern ourselves.
This is a technology that has the potential to transform the global economy in the same way the internet changed it two decades ago. It is still evolving, thus the trepidation of some. The advantages of being among the first movers will be several.
As a country, we decided to lead in this area. The political commitment to this was clear when financial services, digital economy and innovation were entrusted to a Parliamentary Secretary, answering directly to the Prime Minister.
The first step towards this were taken when a Blockchain Taskforce was launched that was entrusted to provide guidance and technical input on a wide where necessarily. This was followed by wide-ranging discussions with stakeholdes, including regulatory authorities and member of the industry both local and international. The result is the launch of a public consultation for the establishment of the Malta Digital Innovation Authority, the framework for the Certification of Distributed Ledger Technology Platforms and Related Service Providers.
In this modern competitive global economy we need to have the courage to look around us and be able to formulate a strategic vision for the days to come. The framework that we are offering for public consultation will be proposing mechanism that will offer legal certainty to a space that is currently totally unregulated. it touches a number of issues including types of authorisations , legal personality and smart contracts.
The framework is based on three main principles ; consumer protection, market stability and market integrity. These will help safeguard Malta's excellent reputation not just in this new emergent sector but as a jurisdiction for companies' that harness this technology in their operations and are willing to invest.
This is a completely new economic sector for Malta. The consultation document is proposing the setting up of the Malta Digital Innovation Authority, followed by a regime for the registration of the Technology Service Providers and the certification of Technology Arrangements. It will then address ICOs and Virtual Currency and all the related services and intermediaries through a specific bill under the MFSA.
The new authority will have the role of promoting governmental policies that favour the development of Malta as a centre of excellence for technological innovation and will among other help to safeguard Malta's reputation by implementing the best standards in the sector. The authority will also play a vital role in the protection of users and consumers, in particular when either directly or indirectly they will interface or use this technology.
We will be taking a principle-based approach, thus avoiding putting unnecessarily burden on industry. The new legislative framework will help separating products and services that offer return and value added from those that are frauds. It will set standards that will help ensure compliance in terms of our international obligations, including anti-money laundering.
Innovation is the way forward for economic growth. Thus as a Government it was of utmost importance to present a framework that does not stifle innovation and provide the certainty for businesses that want to use the blockchain. This framework will pave the way for the creation of new economic niches such as Fintech and Regtech.
It' is an incredibly exciting period for us all. We have embarked on a journey that will lead us to the creation of a new economic sector, the creation of a new industry potentially as big as the igaming industry capable of creating thousands of new jobs. It will compliment and reinforce other sectors including igaming and financial services and act as a catalyst for the creation of new economic sectors. It is a new emergent industry that will have a huge impact on several sectors in aim to improve transparency and efficiency.
The creation of this new industry will make the Maltese economy more resilient, a leader in this space and a hub for technological innovation. Investment and knowledge will be attracted to our shores. In this new emergent sector Malta will be able to move quicker and get a first mover advantage.
Let's make Malta a leader in DLT Regulation.
Silvio Schembri is a parliamentary secretary