Blockchain technology as a revolution
Blockchain technology has the potential to alter business activities and be the driver of economic growth for the next two decades or more. In similar fashion to the rise of the internet, it has the potential to change the way we are doing things, how data is handled and transmitted across networks, and how we do business.
According to the World Economic Forum, it is estimated that by 2025 at least 10 per cent of the world’s GDP will be conducted and managed through blockchain technologies.
We aim to introduce blockchain technology to public administration in order to streamlined internal processes, reduced transaction costs, and have more trusted interactions and data exchanges. Some processes could also be automated via smart contracts. This will result in a better service for the citizens.
The advantages of Blockchain technology and its influence on the Maltese market
As a Government, we intend to look beyond improvements in terms of service delivery. Our aim is to take advantage of this revolution. The development of a National Blockchain Policy document is crucial, laying down the blueprint to transform Malta into one of the leading jurisdictions in this area. Our plans include the setting up of a new Agency that “regulates this technology”.
Malta is already in a privilege situation due to the strong presence of the igaming and financial services sectors. Both, stand to benefit substantially from blockchain technology. This disruptive technology will also impact our financial services sector. The rapid developments taking place in cryptocurrencies cannot be ignored.
If they ful l their promise, they could spearhead a process of decentralisation in the world of nance. We are looking at how to place ourselves in a way to tap this, especially in areas such as securities, and Initial Coin O ering (ICOs).
Regulatory approaches towards the new technology
This will offer new opportunities to the operators in the financial services and new challenges to the regulator. Thus, it is imperative for Malta’s regulatory body, in this case the Malta Financial Services Authority (MFSA), to continue evolving. The MFSA will be strengthened to become more responsive to the needs of the operators and to put the right structures to have a regulatory framework that is more proactive to new technological innovations.
The gaming sector will also see changes in its regulatory framework. The new legislation shall be wider and more coherent, will be underpinned by better monitoring of risk and shall have new reporting facilities adopted to cater for the improved risk management processes.
The new legislation will also target the facilitation of innovation, which includes the use of crypto-currencies. This will provide the industry with fast and cost-effective alternatives to traditional payment mechanisms.
In all the above, regulation is key. Blockchain as a technology in itself cannot be regulated. What we can do is to regulate the use and “behaviour”, guiding the channels through which it may be permitted to flow. A big challenge for us as policy-makers is to devise an Agency that strikes the right balance between regulating and being a catalyst for innovation.
We are after having the best possible legislative framework for Malta to continue being a top player in iGaming and becoming a very attractive destination for blockchain companies to do new business.