The Maltese government have announced that the country’s Registry of Companies will be run on a blockchain-powered system.
The so-called “Blockchain Island” and its very pro-crypto government announced the news this week, making it the first blockchain-run agency in the world. The new agency is in the process of bringing on new staff and hopes to be operational before the end of the year.
Silvio Schembri, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation told the local media:
“The decision to create a separate standalone Registry is in line with the proposed changes to the MFSA which are set to strengthen the internal management structure of the Authority allowing it to focus solely on its regulatory role, while also delve into non-traditional segments of the market.”
The Registry of Companies is a public authority which is responsible for the registration of new Malta-based companies, as well as storing information relating to existing ones. Once a part of the Malta Financial Services Authority, the Registry separated at the end of last year and is now in the process of setting up as a stand alone entity.
A single system is proposed to manage the creation and storage of records in an immutable and fully transparent manner.
“Through an extensive investment in IT, the Registry of Companies will be more efficient and will lessen unnecessary bureaucratic procedures. It will be run by a system which will handle all of the processes performed by the Registry of Companies. The new system will make possible the provision of new services which with the present system are not being provided bringing the agency the first in the world to be run on a Blockchain based system,” said the Parliamentary Secretary.
In 2018, the Maltese government became the first in the world to launch three new Acts that would regulate in favour of blockchain, cryptocurrency, and related industries. Since then its crypto sector has boomed and it has found itself as a jurisdiction of choice for many crypto businesses, including the world’s largest exchange, Binance.
Then at the end of 2018, seven European Member States, including Malta published a declaration to promote the use of Distributed Ledger Technology in a range of sectors including shipping, education, healthcare, and company registry.
Despite Malta’s government being very vocal in terms of promoting blockchain and crypto, not everyone has been quite so enthusiastic.
In February of this year, the International Monetary Fund stated that the promotion and growth of blockchain in Malta posed a significant risk of money laundering and the financing of terrorism. The country is already under the spotlight for a number of money laundering scandals and many expressed concern that the use of blockchain and crypto would further facilitate this.
The IMF stated that the Maltese authorities would need to apply more regulations and sanctions as well as increasing their understanding of the possible risks.
The Prime Minister Joseph Muscat, dismissed claims and stated that DLT would transform politics, civil society, and corporate systems by solving “decades-old problems”.