[WATCH] Silvio Schembri insists Malta is leading the pack in the new economy sector

Parliamentary Secretary Silvio Schembri says the country’s legislative framework is being used by other countries hoping to regularise the industry

Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri
Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri

The country’s new economy sector is leading the way as other countries are following suit on the Maltese model, Parliamentary Secretary for Financial Services and the Digital Economy Silvo Schembri said.

“We literally invented the wheel in this sector, and other countries like France and Germany are using our legislative model,” he said.

Speaking on Saviour Balzan’s Xtra Sajf on TVM, Schembri said that the country is implementing a holistic framework that is targeting various sectors.

The parliamentary secretary said that this is a new industry on an international level, and so the challenges faced are common among all countries.

“This is a new industry for everyone around the world, and so no one is fully prepared. The lack of human resources in terms of individuals specialised in the sector is a challenge faced by everyone,” Schembri said.

Asked what the government is doing to have a trained workforce specialised in the sector, Schembri said that on an educational level, courses at the University of Malta and MCAST have been revised to reflect the new demand.

“We have ensured that the changes are not only done in one sector, or one faculty, for example IT, but an all-round revamp in courses like management, accountancy, law, and engineering,” he said.

For more short-term results, Schembri said that a scholarship programme for students who have already graduated but want to upscale their studies to a master’s degree and doctorate level are being funded by the government.

The parliamentary secretary said that the expected applicants doubled in number, with a cohort of Maltese students graduating and entering the industry within a year.

Asked if Malta is living up to the mantra of being called a Blockchain Island, Schembri said that the government is only interested in attracting the best of the best.

Schembri explained how compared to other countries, requirements in Malta are far more rigid.

“The minimal capital requirement in Malta, is €750,000, while in other countries like Estonia, capital requirements stand at €2,500,” Schembri said.

Schembri also explained how last October, companies working in the blockchain sector were given a one-year period in which they could apply for a license with the Malta Financial Services Authority (MFSA) in order to operate in Malta.

Schembri explained how the MFSA received around 700 applications.

“We are looking at keeping around 20% of those companies who applied, as in the beginning you will attract everyone, and we don’t want everyone, we want the best in the industry,” he said.

On Artificial Intelligence (AI), Schembri said that the technology has continued to evolve, as the government is looking to implement it in various sectors.

Schembri also said that being a small country, there are many positives in terms of implementing new nation-wide legislation.

“Companies see this as a positive as we can offer efficiency at a quicker pace than other countries,” he said.

Schembri explained how next October, the government will be launching a new legal and ethical framework on AI, a process which only took eight months.

On recent criticism directed towards the financial sector, Schembri said that Malta’s challenges are common among all countries.

He added that Malta’s issues are amplified by MEPs who are constantly attracting attention to the situation.

“You have countries like Germany and Finland that had big scandals, which led to the revocation of bank licenses, but you don’t see their politicians constantly talking about it,” he said. 

On the recently-released Moneyval report, Schembri said that the findings are being studied and will be acted upon by the government.

Schembri said that 35% of the 58 recommendations proposed by the report have already been implemented.