Malta’s financial regulators clarified last week that digital currency exchange, Binance, is not licensed “to operate in the cryptocurrency sphere” within the island nation. In fact, the Malta Financial Services Authority (MFSA) has not yet issued operational licenses to any crypto-related company at all.
The Previous Government
Back in 2018, prime minister Muscat had welcomed Binance to Malta (via Twitter), other crypto firms such as OKEx and BitBay, which had been headquartered in Japan and Poland respectively, also moved their operations to Malta.
The country’s low corporate tax rate for international firms in the EU (only 5% compared to EU’s 22%) was one of the main attractions for these firms moving to Malta.
The then-Prime Minister Muscat famously presented his country as a blockchain island in a speech after the Maltese government had approved three crypto-related bills: the Digital Innovation Authority Act, the Innovative Technological Arrangement and Services Act, and the Virtual Financial Asset Act (VFA Act).
Virtual Financial Asset Act
The VFA act essentially requires businesses to get licensed by the Malta Financial Services Authority if they conduct initial coin offerings, trade digital assets, or provide electronic wallets and brokerage activities.
No businesses have been licensed under the VFA framework yet, despite the fact that it’s been more than a year since it was enacted.
Current Government Still Keen on Blockchain
However, although current-Prime Minister Abela has yet to publicly comment on cryptocurrencies and blockchain, the new government is apparently still interested in carrying on as a blockchain island. Bartolo Clayton is the current parliamentary secretary responsible for financial services, digital economy and innovation. According to Clayton, the government of Malta is still committed to following the blockchain path saying:
“The Government of Malta is committed to consolidate blockchain together with other niche sectors. It is the Maltese government’s belief that we believe that more synergies between these emerging sectors should be explored and encouraged in order to reap and exploit their benefits. Moreover, the Government of Malta is opting for an overarching and holistic strategy for the Digital, Financial and Innovative services in Malta. More details about the new strategy will be disclosed in the coming months.”