Bank of Valletta chairman Deo Scerri stressed that Malta’s most influential bank is “dealing with” current developments in the crypto currency industry as well as the Distributed Ledger Technology (DLT) in comments to The Malta Independent on Sunday.
He spoke with this newsroom after BOV held its annual general meeting where the record profit of €174.4 million for the year 2017 was announced.
The year 2017 was described as being one of challenges and successes, due to several developments both bolstering and challenging the bank’s position.
Last November, BOV had abruptly blocked all transactions from account holders to cryptocurrency exchanges, frustrating many who had leaped to invest in this new area.
Currently, those operating in the cryptocurrency sphere as well as companies making use of DLTs are operating in an unregulated market. Malta is one of the countries that have been the quickest to put forward legislation in order to bring some form of regulation, creating legal certainty in a currently unregulated world.
Parliament is expected to debate three Bills put forward by the government which regulates the relevant aspects of DLTs, cryptocurrencies and raising finance through virtual currencies: the Malta Digital Innovation Authority Bill, the Technology Arrangements and Services Bill and the Virtual Financial Assets Bill.
Stories have emerged about local banks’ reluctance to set up bank accounts for companies centred on cryptocurrencies. Parliamentary Secretary for the digital economy Silvio Schembri, in comments to this newsroom, expressed his confidence that many questions will be answered through the introduction of the aforementioned Bills.
Asked about how much relevance these Bills will have for BOV’s strategy in terms of cryptocurrency, Scerri said “obviously, a lot, because these Bills will regulate how these companies will operate in Malta”.
“As a bank, we have formed a strategic committee to deal with the crypto world; we are dealing with it. We know there might be problems with correspondent banks for us to trade these currencies on the open markets.
“We are taking all steps to speak to people in the cryptocurrency world and banks to see how to manage the situation. We are acting on it to see how to move forward. Obviously we need to see the Bills and the regulations so that we will know how to take the matters forward.”
He confirmed that the main concerns centre on virtual currencies rather than DLTs.
Cryptocurrencies refer to virtual tokens which can be used to effect payment. They can be traded on cryptocurrency exchanges similar to how stocks and shares are traded, with the value going up and down.
DLT is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions.