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Governmental digitalization in Malta

May 24, 2018

Recently the Parliament of Malta considered three bills on distributed ledger technology. Simply put, distributed ledger technology (DLT) is widely known as blockchain technology.

Analyzing the provisions of the aforementioned documents, we can certainly say that the public authorities of Malta have a positive attitude towards the blockchain technology.

Malta government authorities intend to establish Malta as a center of “Blockchain industry”, thereafter they have announced the following three draft laws: (I) the Malta Digital Innovation Authority Bill; (II) the Innovative Technology arrangements and Services Bill; and (III) the Virtual Financial Asset Bill.

In a few words, blockchain is allowing digital information to be distributed at a high security level, blockchain technology created the backbone of network. Originally developed for the digital currency, the tech community is now finding other potential uses for this technology. A blockchain includes the whole history of all transactions that have occurred along the respective chain. Progressive states, such as Malta, are keeping up with the times and trying to integrate new technologies to simplify their functioning.

There is a huge potential to use blockchain for different purposes, such as conclusion of contracts, financial services, settlement of financial trades, public administration etc.

Establishment of the Malta Digital Innovation Authority (MDIA) is the main purpose of the Malta Digital Innovation Bill. MDIA will regulate distributed ledger technology and smart contracts, at the same time it will act autonomously and promote government policies.

In the meantime, the Innovative Technology Arrangements and Services Bill would establish the regulatory regime that the MDIA would enforce in the nearest future. The Virtual Financial Asset Bill will create a legal frame for the virtual financial assets market and the Malta Financial Services Authority will be the responsible government body for the oversight.

Malta is creating an absolutely new legal framework by way of the above-mentioned bills. More importantly - this is not an isolated breakthrough, it is a global step towards new technologies and digitalization of all government institutions. Stay tuned to be informed of all legal news in relation to blockchain and digital industries.

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