Beautiful beaches, ancient ruins, and now Bitcoin – Malta is a country which prides itself in its preservation of the old and early adoption of the new.
Throughout history, Malta, sitting in the Mediterranean Sea between Italy, Tunisia and Libya, has fallen under the rule of the Byzantines, Arabs, Spanish, French, and English, finally gaining independence in 1964. Following a policy of neutrality, the small island nation has enjoyed relative peace since gaining its status as a sovereign state.
In 1989, Malta hosted then-US President George Bush and Soviet leader Mikhail Gorbachev who reached an agreement, signally the end of the Cold War, with Bush famously noting: “We can realise a lasting peace and transform the East-West relationship to one of enduring co-operation. That is the future that Chairman Gorbachev and I began right here in Malta.”
Following World War II, the country’s economy was in serious crisis, but after the Malta Summit, the economy grew substantially. Malta is unique as the country possesses relatively few natural resources, produces 20 percent of its food, and has no local energy sources.
Since the 1990s, Malta has relied on creativity to achieve its wealth. In addition to the 1.7-million tourists the island attracts every year, the country was also at the forefront of the online gambling industry which now accounts for 12 percent of Malta’s GDP. As one of the top destinations for e-gaming startups, Malta has taken a very pro-regulatory compliance route, solidifying its spot on gamblers’ computer screens across the world.
While Malta still holds on to its notoriety as an e-gambling hotspot, the country is undergoing a transformation of sorts.
Malta’s thriving tech scene and internet savvy business people are aiming to change the face of the country’s digital reputation.
Beginning with the “Silicon Valletta” initiative, Prime Minister Joseph Muscat is looking to position the country as an EU leader in the digital world. Muscat noted, “We must be on the frontline in embracing blockchain and Bitcoin.”
In October, the Maltese government has committed to begin the process of creating its very own blockchain strategy, with the goal to facilitate business on the island. According to Silvio Schembri, Parliamentary Secretary for Financial Services, Digital Economy and Innovation, “The government is currently working on devising a national blockchain strategy that will lead the country to having a new regulator for the sector and a robust legal framework that will facilitate the use of blockchain technology in offering new applications for the market, whilst making life easier for many.”
Malta is also providing blockchain businesses with generous tax incentives and creating a legal authority which will devise a supportive framework in which businesses will be able to bloom.
This initiative is not without criticism, however. Jonathan Galea, Founder of BitMalta, the country’s go-to Bitcoin exchange, has argued that Malta has not been a fantastic place to do business with Bitcoin. While Galea believes the government’s blockchain initiatives are generally positive, he notes that “more focus needs to be given to cryptocurrencies in general. There was a time when a “stand back and look” approach was recommendable but that time is soon coming to pass. Those who wish to use cryptocurrencies in a regulated manner shouldn’t have to wait so long.”
Cryptocurrency advocates from across the country are putting together discussion groups, meetups, and classes to develop the emerging Maltese crypto-community. The groups are reportedly growing in size as interest gains momentum and several startups have begun adding to this snowball effect.
Following the flop of Malta’s first Bitcoin ATM, a real-estate company, Quicklets, founded by Steve Mercieca, has installed a Bitcoin ATM in the company’s headquarters, with plans to expand the service to several other locations across the island. Additionally, two young businessmen of the company Ivaja, hope to bring a fresh ATM to cryptocurrency enthusiasts, as well.
As Bitcoin and blockchain become household words across the world, Malta may have a chance to carve its name in the stone as early adopters. It will be important for the country to see the full picture, beyond the trend and beyond the “tech of the year.”
Widespread adoption of the idea will be necessary, and while the government is providing a nurturing environment for aspiring startups, the country is lagging behind in the cryptocurrency realm. Convincing “regular” citizens to make use of digital currencies should also play a role in the tech strategy in order to truly create a hub for this new digital platform.
If Malta plays its cards right, however, its aspirations of becoming “Silicon Valletta” could become reality.
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