New Blockchain Committee for the Malta Stock Exchange
Setting up Blockchain Malta’s Think Tank
Malta is one of the few jurisdictions which has recognised the capabilities of Distributor Ledger Technologies, Crypto, and Fintech. Taking an active role within the industry, it has approved three bills regulating such technologies. Blockchain Malta is, therefore, acting as a pioneer towards forming a supportive crypto ecosystem. This revolution is being embraced by Malta, rendering it the world's ‘Blockchain Island’, which has resulted in various Blockchain companies setting up shop in Malta. With a Blockchain Strategy being set out by the Government, the aim is to extend the use of such technologies to different industries, including healthcare and education.
A Blockchain Malta Committee
The Malta Stock Exchange (MSE) has set up a Blockchain Consortium consisting of members of the Exchange’s Board- its Chairman, Chief Executive, and outside experts. The latter will assist in the formulation of a strategy geared towards addressing blockchain as an emerging technology. Dr Abdalla Kablan will be chairing the committee, acting as an MSE Director, entrepreneur and academic specializing in machine intelligence, big data, analytics and computational finance.
MSE’s Chairman, Mr Joseph Portelli upheld that “Malta and the MSE are quite fortunate to have at our disposal our country’s preeminent technologist and a globally recognized expert on blockchain technology. Dr. Kablan has a proven track record within the technology space, evidenced by his latest start-up Hippo Data, the first Maltese company to ever be selected into the London Microsoft Accelerator Program”. Malta is therefore well-equipped to ensure the success of Blockchain Malta within its shores, making as future-proof as possible.
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Capital Markets around the world are also making use of Blockchain technology, including the Scottish stock exchange, SCOTEX, and the Australian Stock Exchange, referred to as ASX. Blockchain Malta has also taken the leap of recognising such technologies within its stock market. The widespread popularity of such technologies is mainly due to their speed, where investors and brokers can receive their money within 15 minutes after a trade is executed. Businesses will also be subject to significantly reduced costs, where it has been argued that Blockchain can save the financial industry over 41 billion annually in back-office costs.
The Malta Stock Exchange has formed a specialised committee to ensure the success of Blockchain Malta. Its Strategic Plan is geared towards the internationalisation and modernisation of the Exchange itself.
Understanding Blockchain
Various misconceptions about Blockchain have formed due to the lack of understanding of such a complex technology. Originally, Blockchain started off as a platform for the currency of Bitcoin, however, blockchain is merely a distributed ledger. It encompasses a method in which information is recorded and shared by an accepting community. Every member within the ‘chain’ maintains his/her own copy of the information. All members must validate any updates collectively, every update being a new block added to the end of the chain. It may be understood as a potentially very secure ledger of digital events, shared between all parties that choose to participate in the events. The identity of the parties involved, and their data, is protected through cryptography and new blocks. If there are changes in events, they can only be updated if there is a minimum of 51% or more of the participants’ consensus. Once the data is entered, it is not possible to erase it, doing away with a central, monitoring and certification authority.
The platform manages how new edits or entries are initiated, validated, recorded and distributed. Blockchain is the ‘tech-charged’ equivalent of the public ledgers of the past, with the added value of permanence, transparency, searchability and the elimination of third-party intermediaries. The inception of blockchain saw the replacement of the intermediary (the keepers of trust) with complex algorithms and technological verification methods. Blockchain can be used in all types of transactions, including those related to contracts, assets, liabilities, identities, or practically anything else that is usually publicly available but can be described in digital form.
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One of the main concerns of Blockchain companies is the lack of certainty around the world on its acceptance, and how it will possibly be regulated. By have three Parliament-approved Bills, Blockchain Malta will be providing a constructive environment for such businesses to flourish. The Junior Minister for Financial Services, Digital Economy and Innovation, Hon Silvio Schembri has already remarked that there are already plans for the use of these technologies in the future, mentioning the use of Blockchain Malta for logistics purposes and in relation to artificial intelligence.
Our Fintech Practice
Chetcuti Cauchi Advocates is a leading law firm within the Fintech industry, where Senior Partner Dr Priscilla Mifsud Parker, and Head of Corporate & Fintech, Mr Steve Muscat Azzopardi are actively advertising and assisting clients to navigate through the new regulatory regime. Should you be interested in setting up your tech company and attaining recognition from the regulatory, launching your ICO under Maltese regulatory framework, setting up a Crypto Exchange or a Crypto Fund, we would be happy to guide you through the regulatory processes.
