Malta Lives Up to its Promise

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Malta seems to fulfill its promise of giving a “lovely sanctuary” for cryptocurrency firms and exchanges with its arguably the “most forward-thinking regulatory agenda.” 

The island country in the Mediterranean, through MSX, the recently unveiled financial technology unit of the Malta Stock Exchange, has sealed several new deals seeking to establish new marketplaces for tokenized securities which include a partnership with Neufund, a platform designed for securities tokenization and issuance. 

Both parties shall create a “regulated and decentralized, global stock exchange for listing and trading tokenized securities alongside crypto-assets.” However, they did not provide additional details about their collaboration. 

This undertaking is a “pioneer in digital finance,” Joseph Portelli, chairman of the Malta Stock Exchange, said. “We are delighted to welcome Neufund as our key partner in building a blockchain-based exchange that is fully integrated with established financial markets.” 

Silvio Schembri, a parliament member and the parliamentary secretary responsible for financial services, digital economy and innovation, said in a separate interview this development continues to affirm the country’s progress in the crypto arena. 

“These are ongoing announcements that continue to reinforce our ecosystem to make Malta the blockchain island. These two new memoranda of understanding will provide the groundwork for the Malta Stock Exchange to operate with the private sector in both the primary market with operators such as Neufund and in the secondary market with operators such as OKEx. Eventually these platforms will continue to expand further to allow other operators to plug in and be part our our blockchain island,” he added. 

But the MSX and Neufund are already planning a pilot project later this year including a public offering of tokenized equity on the latter’s primary market. 

Upon securing a regulatory approval, the same project will become available on Binance through a separate agreement with Neufund, which it said would become “the first end-to-end primary issuance platform for security tokens.” 

Prior to the deal, Malta passed in June three bills related to blockchain, cryptocurrencies, and distributed ledger technology, marking a significant step towards making the nation a “blockchain island.” 

“Today Maltese Parliament unanimously approved 3 bills on DLT/blockchain, a 1st in the World. Honored to have driven these bills. Announced that Mr Stephen McCarthy will be the CEO of the new #Malta Digital Innovation Authority. #BlockchainIsland -SS,” Schemberi had said in his Twitter post. 

The bills, entitled “The Innovative Technology Arrangements and Services Act,” “The Virtual Financial Assets Act,” “The Malta Digital Innovation Authority Act” are expected to guide the government on maximizing the potential of blockchain and attaining its goal of becoming a global crypto business hub. 

The European state has managed to attract numerous blockchain businesses including cryptocurrency exchange Binance and equity fundraising platform Neufund, according to Marlene Ronstedt, who used to work as a writer and journalist.  

“Malta has achieved this in part by removing regulatory uncertainty. Also, in contrast to other jurisdictions, Maltese legislators understand that blockchain is much more than just cryptocurrencies. And Malta is not simply being lenient to attract business, which could be said of Zug, Switzerland – whose loose interpretation of what constitutes a non-profit attracted many crypto companies, which fundraised in the name of the social good to skirt U.S. securities law,” Ronstedt said.  

At present, the European Union has no legal framework governing activities driven by the blockchain technology even though European authorities are considering to institute such a regulation.