Bitcoin schizophrenia in Malta: contradictory statements by the government and banks

Bitcoin schizophrenia in Malta: contradictory statements by the government and banks

It is obvious that there is tension between the traditional financial sector of Malta and, ironically enough, the government that seeks to enter into a new financial future.

Management of the Malta financial services (MFSA) has published a document entitled “Materials for discussion of IPOs coins, virtual currencies and providers of related services” (the”Discussion Paper on Initial Coin Offerings, Virtual Currencies and related Service Providers”) that aimed to “present the proposed policy for the industry that should be taken MFSA to regulate ICO, cryptocurrency and service providers involved in the ICO and other activities associated with virtual currencies”. This is an encouraging sign for members of the Bitcoin community in the country after de facto prohibition of all bitcoin transactions, the oldest Bank.

The problem of determining the cryptocurrency of Malta

MSFA – the main financial regulator in the country. Apparently, it aimed to define recommendations for financial innovation, whether initial placement of the coins (ICO), cryptocurrency (referred to as virtual currencies or CC) or the blockchain technology. It is rare for a new industry – the impact on its regulation.

The purpose of the document MSFA is “the definition of a regulatory framework to support innovation and new technologies for financial services in the field of EXPLOSIVES”. This document marked the MSFA monitoring for “ensuring the effective protection of investors and the integrity of financial market and financial stability.”

The Republic of Malta is a beautiful Mediterranean archipelago located South of Italy, with a population of less than half a million citizens. This is the smallest country in the European Union.

“Discussions will continue from 30 November 2017 11 January 2018,” reads the announcement MFSA.

This is a radical change in the position of the regulator, which even in the summer, warned against cryptocurrencies. In response to the appearance of the first cryptocurrency ATM in the country, the regulator said: “unlike traditional money, accepting payments in the virtual currency is completely dependent on the consent of the recipient. In addition, service providers in the field of virtual currencies are not currently regulated by law and has not received permission from the MFSA”, – reported in Times of Malta in that period. “It is not necessary to store large amounts of money in bitcoins. You should ensure their safety and security,” said management.

Disregard of Bank of Valletta to bitminer

This week, the oldest Bank in the country – Bank of Valletta (BOV) – stopped all cryptocurrency transactions. “The Bank employees were helpful but did not provide me more information,” complained a customer at the Bank. “They just say that the policy of the Bank has changed.”

BOV even went so far as to cancel transactions in SEPA (single Euro payments area). According to reports by Times of Malta, the official spokesman of the Bank said that the ban is aimed at “risk appetite, regulatory requirements and the needs of correspondent banking network.”

It is curious that the government assures the local members of the Bitcoin community that the embargo is a temporary stage. The parliamentary Secretary Silvio Schembri said that such blocking “short-term” and will be withdrawn after the enactment of official policy.

In addition to this, the Prime Minister of Malta Joseph Muscat earlier this year, enthusiastically spoke about bitcoin, saying that Europe should be transformed into a “continent of bitcoin” His administration is also the first developed and adopted the blockchain software. The office of the Prime Minister of Malta has declared its intention issue model cryptocurrency for the test as a way to assess the further development of the regulation.

In the Times of Malta said: “Ironically, 25% of the government’s share in BOV makes it the largest shareholder of the Bank.”

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