On February 16, 2018, the Government of Malta announced a consultation document on “The Establishment of the Malta Digital Innovation Authority; the Framework for the Certification of Distributed Ledger Technology Platforms and Related Service Providers; and a Virtual Currency Act.” The consultation period will close on March 9, 2018. Then the proposed bills will go to Parliament to become effective laws/regulations.

Three Bills

The consultation document proposes three distinct, but related bills:

  1. The Malta Digital Innovation Authority Bill (MDIA)
  2. The Technology Arrangements and Services Bill (TAS)
  3. The Virtual Currencies Bill (VC)

Together, the three bills inter-operate to produce a comprehensive and unique legal framework that offers legal certainty and regulatory coverage of Blockchain technologies and crypto-currencies.

The Malta Digital Innovation Authority Bill

The Malta Digital Innovation Authority will focus on innovation across all sectors of the economy, while protecting the public interest. In particular it will ensure that there is no overlap between other national competent authorities, when their regulatory actions address the same technological innovations.

To better coordinate cooperation between the MDIA and other regulators, the bill proposes the establishment of a “Joint Co-Ordination Board.” The MDIA will in no way restrain the autonomy or the supervisory functions of other regulators.

The Technology Arrangements and Services Bill

The Technology Arrangements and Services Bill will institute a framework for “Technology Arrangements.” Initially, such arrangements are typically those provided by Blockchain technologies, such as:

  • Distributed Ledger Technologies (Private or Public Blockchains)
  • Smart Contracts
  • Decentralized Autonomous Organizations and similar

The framework recognizes particular subjects that will play a role in a registration or certification process. The subjects are:

  • System Auditors
  • Technology Service Providers
  • Administrators (both technical as well as fiduciary)

A Technology Service Provider may seek registration with the MDIA, on a voluntary basis.

The System Auditors and the Adminsitrators need to be approved by the MDIA.

The framework will further address Private Law issues that arise around the deployment and use of Technology Arrangements.

The Virtual Currency Bill

The Virtual Currency Bill defines a Financial Instrument Test whereby clear criteria are given to determine if a Virtual Currency or an ICO should be considered as a financial instrument. In that case, existing investment services legislation applies, including among other MiFID and the Prospectus Directive. The intent is to ensure investor protection, market integrity and financial stability.

Even for ICOs / Virtual Currencies that do not qualify as a financial instrument,  the bill sets out minimum transparency requirements, in particular for the kind of information that issues need to provide to prospective investors.

A significant expressed intent is that pure utility tokens would not qualify for any kind of regulation.

I accelerate business performance in knowledge-work, without compromising sustainability, quality or humanity, through patterns, mental models and emerging technologies. I divide my time between being a Blockchain Strategists and an organizational performance consultant, developing my own "TameFlow Approach" - a systems thinking approach to creating breakthrough performance-innovation in knowledge-intensive digital-businesses. Highlights: ✦ 2020: Advisory Board Member of the SOV Development Foundation of the Republic of the Marshall Islands ✦ 2019: Initiator and member of the mirror Technical Committee for Malta on the ISO/TC-307 Blockchain and distributed ledger technologies standard in the International Standards Organisation (Geneva). ✦ Member in the ISO/TC-307 work groups on Blockchain Data Protection, Security, Identity Management, Architectures, Smart Contracts and Smart Governance. Board member of the Startup Malta Foundation. ✦ 2018: Advisor to the Republic of the Marshall Islands on the introduction of the SOV, its own national legal tender crypto currency. ✦ Acclaimed in the “Lattice80 Blockchain 100” list of global Blockchain influencers. ✦ Malta Blockchain Award 2018 winner for “Outstanding Contribution to the Blockchain Island." ✦ “ANGI Malta Business Award 2018” at the House of Representatives of the Italian Government in Rome. ✦ Founding member of the OXBC, the Oxford Blockchain Foundation. ✦ Founder of the "Blockchain Island Club," a business club for anyone interested in Blockchain Technologies. ✦ 2017: Strategic Lead on Malta’s National Blockchain Task Force within the Office of the Prime. ✦ Founder and first Chairman of the Blockchain Malta Association. ✦ 2016: Strategic Advisor for the Maltese Ministry of Economy. ✦ Developed the vision of “Malta, the Blockchain Island.” ✦ Designed Malta’s National Blockchain Strategy. ✦ 2015: For R. Bosch Gmbh, global work flow process improvement 8,000 people, 120 teams, 70,000 change requests per month. ✦ 2014: For William-Hill Online UK and Gibraltar: Organisational performance improvement (productivity +240%, time to market -70%). ✦ Won the UK Agile Awards 2014 in the category of “Best Use of Agile in the Private Sector.”

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