The much awaited Bills which will implement a legal framework for Distributed Ledger Technology (“DLT”) and cryptocurrencies, as anticipated by the Consultation Document on Blockchain, Distributed Ledger Technology and Virtual Currencies have been approved by Cabinet and have been presented to Parliament for their first reading.
The three Bills which have been presented to Parliament on Tuesday 24th March are the following:
- Malta Digital Innovation Authority Bill: The Bill establishes the Malta Digital Innovation Authority (“the Authority”) and will focus on internal governance arrangements. The affairs and business of the Authority will be carried out by a Board of Governors. This Bill will also outline the duties and responsibilities of the Authority, one of the key roles being the certification of DLT platforms to ensure credibility and provide legal certainty to users wishing to make use of a DLT platform. The purpose of the surveyors and the certification of a DLT platform is to appraise the functioning of DLT platforms and ensure that the data being logged is accurate and genuine information. The Consultation Document issued on the 17th February 2018 proposed that the certification of a DLT platform will not be a mandatory requirement but will be made voluntary.
- Technology Arrangements and Services Bill: This second Bill will deal with the possibility for registration of Technology Service Providers and certification of Technology Arrangements (“TA”) with the possibility of having the TA being granted separate legal personality.
- Virtual Financial Assets Bill: The third and final Bill will focus on the regulatory regime applicable to Initial Coin Offerings (“ICOs”) and the regulation in respect of certain service providers which will be involved in activities related to ICOs. The Bill will also outline the regulatory regime which will be applicable to cryptocurrency exchanges.
Malta has witnessed an exponential worldwide interest from exchanges seeking to relocate to Malta and issuers of ICOs wishing to launch from Malta. The proposed Bill will further strengthen Malta’s position on the DLT front and solidify its reputation as a Blockchain island.