Malta has come up as a new crypto hub by providing much-required banking support to cryptocurrency businesses. As bringing changes to the banking regulations were not possible due to the risk associated with cryptocurrencies, the Maltese Prime Minister mentioned stable coins as a way for crypto businesses on the island to move ahead.
Won’t intervene in banking regulation asserts PM
According to the report published on Chinese website CNgold.org, all seems to be not going smoothly for crypto business at the “blockchain island” Malta. All their hopes to getting banking support were in high spirits when Joseph Cuschieri, an official at the Malta Financial Services Authority (MFSA), promised to take action against the bank’s conservative attitude towards cryptocurrency companies. But now everything seems to have hit a roadblock when the Maltese Prime Minister Joseph Muscat proposed crypto businesses to shift towards stable coins.
“We’re obviously not going to intervene in banking policies because they have to deal with issues such as correspondent banking and risk assessments,” Muscat told while addressing the press. “Our job as a government is to create this new market and not allow a vacuum to form within it. Some platforms are already banking in cryptocurrencies and new sectors, such as stable coins, are being set up that is being viewed as more secure. That’s the way the sector is evolving and we look forward [to such developments] positively.”
“Also, whenever people come to Malta to do business in the regulated cryptocurrency sector, I always urge them to maintain their previous banking arrangements.”
Muscat’s interference comes very shortly after MFSA chief executive Joseph Cuschieri promised action in light of banks’ conservative approach towards crypto companies.
“It is abundantly clear that Malta needs more banks to participate in the development of our economy, particularly in the digital and FinTech space,” Cuschieri said. “I am not happy with the current situation on various fronts and doing nothing is not an option for me. Our banking strategy and policy review to be published next year will address this challenge in a holistic fashion and we will consult with all stakeholders before any decisions are taken.”
These comments do come as a slight setback for crypto business as, since early 2018, Malta has been focused on building an ecosystem that improves and is friendlier to crypto and blockchain-related companies. Striving to turn the Mediterranean nation into “Blockchain Island,” the government had opened its doors to blockchain and other so-called distributed ledger technologies. Malta always worked with a vision that the island could become a haven for cryptocurrencies like Bitcoin. On Legislative front as well, In July 2018, the Maltese parliament had passed three bills to set a regulatory framework and drive innovation in blockchain-like technologies with a hope that these laws will attract foreign financial tech companies to establish themselves in the country.
The only thing that it couldn’t turn in its favor was the banking regulation and the support of banks as it would have to deal with a series of issues such as correspondent banking and risk assessment. And now it doesn’t seem to happen anytime soon.
Will crypto business turn to stable coins or will Malta lose its status of being blockchain friendly? Do let us know your views on the same
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.