MALTA Law and Practice Contributed by: Ian Gauci and Cherise Abela Grech, GTG Legal
10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry While local banks have been cautious in their approach to implementing the use of DLT in their current systems, the Malta Business Reg - istry (MBR), which is responsible for the registra - tion of commercial partnerships and companies in Malta, is expected to roll out a Central Data Repository. This is intended to be a secure, digi - tal platform that will store key documents and identity credentials in an easily accessible single e-wallet, which will enable individuals and busi - nesses to share important documents quickly and securely with government entities, elimi - nating repetitive bureaucratic processes and speeding up compliance tasks. 10.2 Local Regulators’ Approach to Blockchain MiCA does not regulate blockchain technology directly but instead governs crypto-assets, issu - ers and CASPs operating within the EU. How - ever, it indirectly impacts blockchain by setting rules on how crypto-assets are issued, traded and used within DLT environments. It is also important to bear in mind that Malta’s DLT framework, which came into effect in 2018, includes the following pieces of legislation (each substantiated by various rules, guidelines and subsidiary legislation), which remain applicable despite MiCA’s coming into force: • the Malta Digital Innovation Authority Act, Cap 591 of the Laws of Malta, which sets up the MDIA (the Maltese authority primarily responsible for promoting digital innovation); and
• the ITASA, which provides for certification by the MDIA of ITAs and authorisations for inno - vative technology service providers. 10.3 Classification of Blockchain Assets Under the VFAA, if the asset in question qualified as a VFA, any person that conducted any of the following activities in or from within Malta in rela - tion to VFAs required a licence from the MFSA: • the receipt and transmission of orders; • the execution of orders on behalf of other persons; • dealing on own account; • portfolio management; • custodian or nominee services (of VFAs including cryptographic keys); • the provision of investment advice; • the placing of VFAs; • the operation of a VFA exchange; and • the transfer of VFAs. MiCA regulates the provision of crypto-asset services – ie, any of the following services and activities relating to any crypto-asset: • the provision of custody and administration of crypto-assets on behalf of clients; • the operation of a trading platform for crypto- assets; • the exchange of crypto-assets for funds; • the exchange of crypto-assets for other crypto-assets; • the execution of orders for crypto-assets on behalf of clients; • the placing of crypto-assets; • the receipt and transmission of orders for crypto-assets on behalf of clients; • the provision of advice on crypto-assets; • the provision of portfolio management on crypto-assets; and
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