Blockchain to match gaming industry levels of trading within five years

The volume of cryptocurrency and token trading in and from Malta is increasing daily and is expected to match the volume of trading registered by the gaming industry locally within five years, MaltaToday has learned.

One cryptocurrency exchange alone recorded 12 transactions in 10 days in November as the volume of trading, and the number of the operators in Digital Ledger Technology (DLT) activity in Malta – are on the rise following the introduction of the Virtual Financial Assets Act.

The Malta Financial Services Authority (MFSA) has received more than 340 notifications from operators in DLT – Blockchain – activities in Malta since the VFA Act came into force on 1 November 2018.

The staggering amount of notifications received, which highlight the extensive Blockchain-related activities and related services being offered in and from Malta, include 58 notifications from companies wanting to issue Initial Coin Offerings (ICOs).

Companies involved in Blockchain activity, whether as agents and intermediaries or as players directly in the field, had until the VFA Act came into force to notify the MFSA of their activities.

In total, the MFSA received around 340 notifications, of which 259 were found to have had the required detail and documentation submitted in full and could therefore be processed immediately. The rest were referred back to the applicants for further details.

Of those 259 notifications, 41 were by VFA agents, 36 by issuers of ICOs and 182 were received from service providers. ICOs are a means of raising funds, whereby an issuer issues tokens, or a cryptocurrency, and offers them in exchange for funds.

Parliamentary secretary for digital services and innovation Silvio Schembri said he was highly encouraged – and surprised – by the feedback and uptake the Act generated.

“Malta has become a powerhouse of economic innovation, and this legislation places so far ahead of other countries,” he said. “Now when we talk, people and countries listen.”

Schembri said the fledgling industry was having a ripple effect on other sectors.

The need for trained professionals and the plethora of job opportunities created overnight has pushed education centres, including established universities, to start offering diplomas, graduate and masters degrees in DLT, cryptocurrency, ICO and virtual financial assets servicing.

As with the gaming industry, DLT is expected to impact infrastructure over the next few years, as more professionals and companies choose Malta for their base of operations and for their employment destination.

“We are already discussing this with other ministries and authorities and we are getting complete cooperation on how to prepare ourselves for the expected growth,” Schembri said.

He said the government, like the MFSA, was committed to ensuring security throughout the industry and to fight abuse and money laundering.
“We were not content with that and our new legislation now also covers crypto to crypto activity,” Schembri said.

He said that, all clichés aside, Blockchain was truly just the beginning and that the possibility for growth was endless.

“What this industry has in its favour is the fact that is it is not limited by physical, geographical barriers. This makes us look forward to an exciting couple of years, as Blockchain becomes more and more mainstream,” Schembri said.

“We are at the forefront of this revolution, and the feedback to the VFA Act proves that major players are already seeing Malta as the true home of Blockchain and future innovation.”