DLT and Cryptocurrency laws were presented in the Maltese Parliament
Yesterday Tuesday 24th April, the Maltese Parliament has presented and passed three bills associated with the distributed ledger technology and cryptocurrency. Parliamentary Secretary Silvio Schembri presented the first reading of the following laws in parliament; The Malta Digital Innovation Authority Bill, the Technology Arrangements and Services Bill and the Virtual Financial Assets Bill.
How does Distributed Ledger Technology (DLT) work?
DLT technology is a new storage system which distributes data information in a decentralised blockchain. Every block within the blockchain are directly linked and processing information to each other. In addition, each block is secured by a complex encryption known as ‘cryptography’, which it is difficult to tamper with. Whenever a transaction is processed a timestamp is issued ensuring that the data is approved. Moreover, DLT technology cannot alter data and every processed data cannot be modified. Moreover, information stored in the blockchain is there to stay.
Why are these three bills on DLT and cryptocurrency important?
The first bill presented was the role of Malta Digital Innovation Authority (MDIA). The role of the MDIA is to certify DLT platforms, enabling a legal certainty to companies or persons willing to use these platforms.
This government agency will accredit DLT platforms such as blockchain, verifying and accept information processed on the platform. MDIA has the responsibility to detect foul play, making sure that the information is genuine. Through the MDIA, persons using the DLT platform will be assured that these certified services are genuine, trustworthy and efficient.
The second bill, the Technology Arrangements and Services Bill, focuses on recording Technology Service Providers and the certification of Technology Arrangements. This system will work via administrators and auditors making sure that the platform is lawful.
While the third bill deals with virtual currencies. In fact, the Virtual Financial Assets Bill is set to regulate the provision of virtual currencies set by ICO’s (Initial Coin Offering).
In a press conference, Mr Schembri stated that DLT companies and international regulators are showing interest in working with the Maltese government thanks to these progressive regulations.
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