The Malta Financial Services Authority (MFSA), together with the Financial Intelligence Analysis Unit (FIAU), recently published a Guidance document for financial institutions creating accounts for financial technologies (fintechs). The aim is to encourage innovations including cryptocurrency and blockchain within the fintech sector, and protecting the integrity of the financial market.
The published Document comes few months after a joint public consultation focusing on helping financial institutions to get a properly appreciate the risks of any potential clients, dynamic in technology contingent parts, before being overhauled.
The document will not be binding and it does not give any exemptions from law or any obligations which a subject individual has to achieve regarding combating illegal and illicit activities associated with blockchain, bitcoin and cryptocurrencies – such as money laundering, fraud, drug trafficking, terrorism financing, and others. The document wants to offer extra assistance especially on matters of adherence, for instance, on how it can be done when a potential client does specific pursuits.
This is another step on the country's way to becoming a blockchain and cryptocurrency hub. One year down the road, the responsible authorities are still conducting a wider consultation to make sure that every participant or stakeholder is very well cognizant of what the three digital asset and blockchain laws introduced by MFSA really mean to the industry and the country at large.
The public is argued to read the guidance document and the Implementing Procedures plus any other important guidance-related information published by the FIAU, not forgetting reading and understanding the general context furnished by the Prevention of Money Laundering and Funding of Terrorism Regulations - PMLFTR. All affected businesses or financial institutions are buoyed up to make use of this guidance document when hatching their risk assessment measures, gears, and policies.
According to the chief officer strategy, policy and innovation Dr. Christopher P. Buttigieg, MFSA is informed about the dire need to hit an intricate equilibrium in this particular sector. There are no way how fresh businesses will be attracted into the fintech if such organization, or firms don’t see the basic banking services.
The chief officer added that banks in Malta have been working under some risk-based primacies, however, these institutions have to start following the strong regulatory standards existing. What Malta wants is to create a favorable environment for all businesses and even attract new ones in large numbers, hence growing and boosting the country’s economy.
Many European countries including Italy, UK, San Marino, France, Germany, etc.are looking to regulate blockchain and cryptocurrency in order to prevent illegal activities. In July last year, Maltese legislators passed a Virtual Financial Assets (VFA) Act to bring security into this emerging sector. A week ago, San Marino approved blockchain and virtual currency regulation to help in governing novelties and all other activities associated with blockchain and fintech.