Today, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation the Hon. Silvio Schembri unveiled a consultation document on the establishment of the Malta Digital Innovation Authority (“MDIA” or “Authority”) whilst also mentioning that work is underway in relation to the framework of three draft bills that shall set out a regulatory framework for the certification of Distributed Ledger Technology Platforms, ICOs, Virtual Currencies, Virtual Currency Exchanges and related service providers.
The consultation document explores the proposed promulgation of draft bills, namely:
1. The TAS bill, which sets out the regime for the registration of Technology service providers and the certification of Technology Arrangements.
2. The MDIA Bill - provides for the establishment of the Malta Digital Innovation Authority;
3. The Virtual Currencies Bill – this shall set out the framework for ICOs and the regulatory regime on to the provision of certain services in relation to virtual currencies. This bill would regulate intermediaries such as brokers, exchanges, wallet providers, asset managers investment advisors and market makers dealing in virtual currencies.
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The Malta Digital Innovation Authority
As new disruptive technologies continue to make leaps and shake the market every day, the need was felt for a specialised authority which will be able to explore the opportunities created by new technological arrangements while ensuring consumer protection and the public interest.
The MDIA will oversee the certification of technology arrangements, as well as the registration of Technology Service Providers (“TSPs”) which will be at its discretion and subject to appeal from the respective tribunal.
The MDIA will be set up to fulfil a multitude of aims which will help promote governmental policies which favour the development of Malta as a hub for new innovative technologies. The new Authority will also explore the adoption of such technological arrangement in public administration by the Government technology hub. In doing so, it will promote the advancement and use of digital ledger technology. While fostering the right environment for innovation, the MDIA will actively take steps to safeguard Malta’s sterling regulation by promoting sound values of transparency and audibility in the use of digital ledger technology and any accessory software. The MDIA will collaborate with other states as well as international organisations to ensure that adequate standards are implemented in the sector and to harmonise practices in conformity with international norms.
While promoting innovation, MDIA will also seek to ensure that full consumer protection is achieved and that the use of DLT and other disruptive technology is coupled with education on ethical standards and legitimate exploitation and that such standards are enforceable.
Above all, the promulgation of these acts shall grant legal certainty to industry specialists in an area that was previously confined to a regulatory vacuum or to mass uncertainty with respect to the application of laws and legal principles, both from a national and cross-border perspective.
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The Financial Services specialists at Chetcuti Cauchi Advocates shall participate in this consultation as we believe that by harnessing the potential of disruptive technologies, businesses will be able to enjoy unprecedented benefits. For a detailed overview of the proposed framework, please click here.
Should you wish to discuss how your business could become one of the pioneers in this exciting sector, feel free to email us.
