Recent days have seen the little nation of Malta stake a big claim for global blockchain leadership. Prime Minister Joseph Muscat’s government has long been supportive of cryptocurrencies, calling them the “inevitable future of money” back in March. Recently, three bills were passed in Malta’s parliament that are set to provide a new foundation for digital currency in the nation of 432,000.
A Blockchain Trinity
Each bill passed in Malta’s capital of Valletta looks to foster blockchain’s presence. If brought into law, The Innovative Technology Arrangements and Services Act, The Malta Digital Innovation Authority Act, and The Virtual Financial Assets Act, will squarely position Maltese law as one of the world’s most crypto-friendly.
While Malta has long been inclined this way, there’s, of course, a difference between positive sentiment expressed by government and business leaders and codified law. The former may attract overseas investment, but the latter (with the certainty it brings) is sure to.
Valletta and Brussels
Yet despite Malta’s embrace, the reality remains that the uncertainty of the European Union’s (EU) approach to cryptocurrency could throw a spanner in the works. For its part, Valletta has declared that what the EU does in its capital of Brussels will have no bearing on how cryptos are treated in Valletta.
Yet even if Valletta does avoid a direct EU crackdown on cryptocurrency, the possibility remains secondary factors — such as EU’s ongoing Tax3 investigation — could yet see the long reach of Brussels play a role in Valletta’s domestic law. While Brussels is powerful, there is surely a balancing act here.
The EU Endurance
In population and economy, Malta is a comparatively small nation to some of the giants of Europe like France and Germany. At the same time, Brussels is also aware that its good standing among the Southern European nations is in short supply.
Given the enduring economic tensions with Greece, many in Spain aggrieved at the EU’s siding with Madrid on the question of Catalonian independence, the success of Eurosceptic party Five Star in Italy — with its founder Beppe Grillo just days ago calling for a Italian referendum on the nation’s use of the Euro currency — Brussels would be weary to set off another spotfire.
Especially if it once again places them in a position as being seen to stifle economic growth with red tape regulation. While London’s prospects of delivering a decisive Brexit deal grow smaller as the U.K confronts the reality of an EU divorce, if Brexit is ultimately the first of many European votes to leave the EU, then Brussels will have no capacity to overlook its flaws. or resist major reform. So, the EU will be unable to argue ‘it’s not us, it’s them!’.
Malta’s Road Map
In seeking to carve out a unique national identity for itself in cryptocurrency, Malta has a long road to travel to meet its bold ambitions. At the same time, the recent history of other smaller European nations like the Republic of Ireland and Estonia in the emerging tech sphere shows there is real potential and economic profit on offer if they can make it stick.
At its core, it appears the success of Valletta’s ambitions will be informed heavily not only by its own domestic progress but the future of cryptocurrencies standing in Brussels. The emergence of a strong anti-crypto policy from the EU capital could deal a heavy blow to Valletta’s plans. On the other hand, if the status quo remains (or improves) then Valletta has a strong path for its future profitability in crypto. One that may just become its greatest investment yet.