[WATCH] DELTA Summit: Malta first to launch certification for blockchain software

The Malta Digital Innovation Authority has released a review framework that aims to give users and investors peace of mind that DLT software is doing what it says on the box

Malta Digital Innovation Authority CEO Stephen McCarthy says widespread use of cryptocurrency is a question of when, not if
Malta Digital Innovation Authority CEO Stephen McCarthy says widespread use of cryptocurrency is a question of when, not if
Malta first in launching certification process for blockchain software

The Malta Digital Innovation Authority has launched a certification process to review blockchain-related software before it gains certification.

The review framework, which is the first of its kind in the world, aims to review distributed ledger technologies (DLTs) to ensure their quality and dependability.

The goal is to give users and investors peace of mind that the DLT software they are using is certifiably doing what it says on the box.

MDIA CEO Stephen McCarthy said that the development of the framework is connected with Malta’s efforts in positioning itself as an enabler of safe and dependable technology, and a jurisdiction where due diligence delves into the technology itself.

He said that the MDIA’s primary objective in the past year was that of setting up a framework to ensure quality and dependability of DLT-based systems, through a technology certification process, with the support of MDIA-approved systems auditors.

In comments to MaltaToday, McCarthy highlighted that technology was increasingly interfacing with humans, which made it all the more important for that technology to be safe.

He said that, all too often, the claims of software’s uses does not match its actual functionality, which is why rigorous guidelines are necessary

"The MDIA will review and auditing the technology to make it as safe as possible for use by both users and investors," McCarthy said.

In this regard, the MDIA has accredited its first independent system auditors, amongst which are KPMG, PWC, BDO and STIS group.

"Our role is to ensure the functionality of the software is in line with what it promises to do. This due diligence has to be extended to the technology itself, and Malta is the first jurisdiction delving into reviewing the technology before giving it certification," McCarthy said.

There are two classes of DLT software here, he said: non-financial software and financial software.

In the case of the former, the software is handed over to the MDIA for reviewing on a voluntary basis, to obtain certification. Once it is certified, this will give assurance to users and investors that it is a robust system.

When it comes to financial software, this falls under the Malta Financial Services Authority's remit for certification, but the MDIA will be supporting the MFSA in order to review the underlining technology. The MFSA has made it compulsory for DLT technology to be audited by a systems auditor accredited by the MDIA.

McCarthy added that the certification process would eventually be extended beyond DLT and into Artificial Intelligence and quantum computing.

"We will widen our scope to most innovative technology software," he said, "Such software is being interfaced with gaming software, financial services software, and so on, so I expect that they will require MDIA certification or at least a systems auditor review."

Widespread cryptocurrency use a matter of when not if

Regarding the cryptocurrency, McCarthy said that their widespread use was not a matter of "if" but "when".

He underscored that, while until up to a year ago, the majority of discussion on cryptocurrency thought negatively of the technology - because it doesn't have the function of money - things have now changed, and it is being realised that its challenges can be overcome.

"The world is moving towards making crypto more credible, and critics are changing their tune about it. We don't know when [widespread adoption] will happen, but it will probably be in parallel with the fiduciary money we have today. I am convinced crypto is there to stay and in the future will be used on a larger scale."

READ MORE: DELTA Summit: ‘Artificial Intelligence will be key driver for growth across Maltese islands’

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