|Malta is known as a blockchain paradise. However, blockchain enterprises find it increasingly difficult to cooperate with local banks. Ever since Binance and other major players in the sector have moved to the Mediterranean island, Malta is famous for being a kind of a last refuge for blockchain businesses.|
The lax regulation and the will of Malta‘s government to support the new industry has attracted many startups in the crypto sector. Most notably Binance when the crypto exchange giant fled the strict regulation of both China and Japan. Meanwhile, the island has developed into a kind of pilgrimage site for blockchain companies. The result for the island is a flourishing and booming economy.
No License – No Will to Cooperate
However, it is not as easy as often portrayed for many companies. According to a recent report by the Times of Malta, blockchain companies are currently struggling to receive a license of the Malta Financial Services Authority. Currently, 28 crypto companies are awaiting their license without which they cannot operate in the country.
Another problem is the unwillingness of many banks to cooperate with crypto companies. A decision that is probably a consequence of the so-called crypto winter. The decline of prices of many cryptocurrencies that made a 90% decrease of a portfolio a usual occurrence. But this is not where the problem for many companies end. Reportedly, the banks on Malta do not distinguish between startups that operate with their own cryptocurrency and companies that merely include a blockchain to their business. A vast difference as companies that operate with blockchains are usually dealing with fewer risks and usually offer concrete problem-oriented solutions in their specific branch.
IMF Warns Malta’s Financial Authority of Risk
The International Monetary Fund warned the authorities of Malta two weeks ago about the risks in the crypto sector in a recent report. According to the IMF, it is hard to assess all risks that need to be considered when cooperating with crypto companies. It would „cyber risk experts, technology experts and lawyers specialized in technology“.