If you were starting a cryptocurrency financial platform, where would you look to build it? Where would you base your operation from? Now, note that I used the term “cryptocurrency” and not the term “blockchain”. Building a (1) blockchain company is entirely different to a (2) cryptocurrency company. Why? Because one of those two operations is subject to immense regulation that could stifle your ambitions. And you know which one, don’t you? That’s right, number 2: cryptocurrency.
I was actually just writing a story about Joyce Kim, co-founder of the Stellar foundation. She is quite famous for resigning from her position as Stellar’s CEO due to the slow-moving nature of legal changes in the financial industry. Building a cryptocurrency company with a vision to change the world (like Stellar’s) is going to require a lot of perseverance; because not only will you be up against the most powerful monopolies in the world, you will also face lengthy struggles of becoming legal in some of the more developed countries (like USA, China, Korea, England, etc.).
Which is why the choosing of where you build your company could be just as important as how you build your company. BitMEX built the world’s largest Bitcoin derivatives exchange in the Seychelles. Binance built their crypto behemoth in Hong Kong. Crypto.com (formerly “Monaco”) and Tezos are both based out of Zug, Switzerland. All these companies have utilized the welcoming regulatory framework in these jurisdictions to their advantage, and have been able to build quickly, and pivot swiftly.
So where would you build your crypto company?
I personally know a few crypto companies looking at the likes of Mauritius, Seychelles, Isle of Man, and Malta. And that last one is where I am most interested.
A country with the highest GDP growth in the European Union, Malta are now seeing the benefits of being so legislatively progressive. Where larger countries are slow to adjust and move with the times, Malta have been able to welcome the fourth industrial revolution and create regulatory framework that fosters its growth and innovation. In turn, feeding back into their economy. It’s a genius strategy.
Malta started with online gaming, which exploded, and now contributes to a total of 12% of the country’s GDP. Constructing regulation that fostered the industry’s growth and welcomed companies with open arms, leaders in online gaming globally streamed in to set up shop in the mediterranean island. And it seems the same is happening now with cryptocurrency-based companies.
Last year, the President of Malta, Joseph Muscat, addressed the United Nations General Assembly in New York City. And with 160+ heads of state in the audience, stated with full conviction: “Blockchain makes cryptocurrencies, the inevitable future of money, more transparent, since it helps filter good businesses from bad businesses.”
Here is a head of state who “gets it”.
Changpeng Zhao, CEO of Binance, saw this sentiment and made sure he was in on the action. Binance set up an office there last year, and Zhao stated it was because of the country’s progressive approach to FinTech: “Malta is very progressive when it comes to crypto and fintech.”
I was privileged enough to hear first hand exactly why Malta are positioning themselves as such pioneers in the regulatory race for cryptocurrency innovation.
At the Blockchain Africa 2019 conference, Bitcoin Events secured one of Europe’s leading contributors to the Blockchain industry to speak on progressive cryptocurrency regulation. JP Fabri, economist in the private cabinet of the former Prime Minister of Malta, has consulted a number of governments on FinTech and Blockchain regulation. It is a great thing then, that so many of the Western Cape government were in attendance at the Cape Town version of the conference, because Mr. Fabri was able to explain and consult on the type of regulation that would foster cryptocurrency growth in the country – using his first hand experience.
I grabbed Mr. Fabri for a quick interview during one of the coffee breaks at Blockchain Africa, and asked him why Malta has taken on such a radically progressive approach to FinTech and Blockchain, and asked for what advice he would give governments and companies today looking to take advantage of the “blockchain opportunity”.
This was a remarkable interview with a remarkable man, and it highlighted to me exactly why Malta are the best economically performing government in the European Union. If Malta can continue on this track, I wouldn’t be surprised if we see an industry jurisdiction that resembles that of Hong Kong’s prowess. Time will tell. And how Malta would love it to be told well.
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