Blockchain Island 2 | How Malta Is Becoming a Global Capital of Crypto

In our first film about Malta, we asked students
at the University of Malta a simple question: “What do you know about
blockchain and cryptocurrency?” And maybe you remember that
almost none of them knew anything. I don't think so. Blockchain Island, no. I think most of us don't know about it. I might be mistaken though. It’s hard to believe, but the situation
has changed after the release of our first film! This is how the Media can
change the public discourse! What’s happened at the University of Malta? Well, we'll talk about that in a little bit. A lot has changed since
our last visit to Malta.

The only thing that remains
unchanged is the Megalithic temples. They have been standing here for more than
5000 years, even longer than the Egyptian pyramids. Some scholars believe that these are the oldest
free-standing artificial structures on Earth. Last time we were here,
we didn't have time to see the temples. And this time we didn't expect to see this. So now we're in the engine room of the World
War I ship "Russell". And that's not the actual ship, as you can
see, we're on the set. Indeed, we are on the set for a documentary
film. And these decorations are an exact one-to-one
replica of the ship from the World War I. So, everything is working. You can start the engine and it will start
moving. We can have water splashes from all over the
place from the ceiling, from the bottom. During the filming we can do the fire to show
how the people used to work.

And here is a realistic recreation of a 35-meter
long submarine which is also part of the set design, but it is still being built for the
upcoming movie. To raise money for the film, this Malta-based
production company has even accepted some investments in cryptocurrencies. Our latest project "Russell" was partly financed
by the group of investors with a cryptocurrency. We had at around 1,000 bitcoins invested in
our latest production.

At the moment the company is working on a
massive project that will consist of 12 episodes, narrating various shipwrecks that occurred
in the Mediterranean Sea. But the company's ambitions are not limited
to only film productions. We have several projects in development space
in the moment. One of them is the online cinema platform,
where in order to register or to be able to watch the films, you have to pay in the cryptocurrency. This project will be launched later this year. For the productions made in Malta, Maltese
government is offering the cash rebate up to 27% which means that the money you spent
on the island – you'll get back, which is a good reason for the big productions all
over the world to come to Malta and make their movies here, on this island. We have a very attractive tax regime, that's
a known fact nowadays, but also, as a government, we have an open door policy and we tend to
describe ourselves as a disruptive government.

There'd been a time when this building on
the Castille Square was the house for the knights of the Order of St. John, formally
the Most Venerable Order of the Hospital of St. John of Jerusalem. And this building had been called the Auberge
de Castille, or the hotel of the Castille. In the 1740s, the building was completely
rebuilt in the Baroque style with a rectangular layout and a courtyard, named "The Best Building
in Malta", it now serves as the palace for the Maltese government. And here one of the most promising and innovative
crypto and blockchain related pieces of legislation in the world is being developed. So, on the 1st of November, as you know, the
bills work came into effect.

Now the MFSA is in the process and they moved
from that in the coming days. They will be issuing the first list of the
VFA agents. These are the gatekeepers, the first contact
for applicants, they link in virtual currencies, which needs to hire in order for them to submit
an application with the Malta Financial Service Authority. This is the regulator which will regulate
all stakeholders that have or are dealing with the virtual currencies. We are also looking into other areas. For example, when it comes to land registry,
when it comes to registration of renting contracts in terms of housing, anything that has to
do with registration practically, because registries are the prime use example for blockchain. And we are also looking into other areas. For example, when it comes to logistics and
given our geographical position, at the center of the Mediterranean, it's natural for us
to look into that direction.

The Maltese government has not stopped and
is moving further. This year the University of Malta has launched
a degree on blockchain tech. And if earlier it was just several courses
related to the emerging technology, now it has become a full-time master's degree program. And the idea behind it is to allow for different
professionals to get specialisation in their particular area, would be it IT, business
and finance, or be it law and regulation. But it also gives them an introduction to
the other peripheral areas, because working in this industry you really require the multidisciplinary
expertise that makes up this exciting new field. In October 2018 the Government announced it
was granting 100,000 euros to offer students a scholarship scheme, so they can specialize
in blockchain. The program is open to everyone, and it has
an interdisciplinary approach. We will promote uptake in this particular
masters not only, but also in other masters and PhD programs and for this Master of Blockchain
and DLT we are expecting to get somewhere between 20 to 50 students in the first year. So, for example, a lawyer enrolling in order
to gain a better knowledge for the laws concerning cryptocurrencies will also get an introduction
to the technology side of blockchain.

So no matter what is your discipline, this
course will have something for you. By the way what topics would you like to see
a documentary about? Let us know in the comments. Now, Malta is the first country in the world
to issue education certificates on the blockchain. Last year, it was launched as a pilot project
for just a few weeks, but now this project extends to all educational institutions in
Malta. So, practically speaking, Malta is the only
nation in the world, where all education certificates are issued on the blockchain. Today, the Government is looking into other
areas of services. For example, it is in a very advanced stage,
when it comes to the registry of companies. So now companies or people who would like
to register a company by end of this year would be able to do so through the registration
process to have a certificate of their company on the blockchain and through a processing
methods using also AI.

In November 2018, the Virtual Financial Assets
or VFA entered into force in Malta. In accordance with it, all cryptocurrency-related
projects must obtain a license from the Malta Financial Services Authority. Only then will they be allowed to provide
legal financial services. Since last year, the MFSA has received several
dozens applications for registration as agents of Virtual Financial Assets. As you are aware crypto assets have a number
of years being mentioned as a vehicle for money laundering and financing of terrorism.

Now, as a jurisdiction, we want to avoid that. So we decided to come up with the agent's
proposal in the agent framework which also has a role in this regard to ensure that only
the right people get access to our system. The agents will be doing the first set of
checks and rejecting applicants that they find that do not have the criteria to get
a license. And then after the application is made with
those applicants that have the right criteria, the MFSA will do additional checks. Five months after the Virtual Financial Assets
Act or the VFA Act entered into force in Malta, the domestic financial regulator approved
14 VFA agents. Agents are now obliged to evaluate their client's
business plans to make sure they comply with regulations before applying to the MFSA. Basically, the Malta Digital Innovation Authority
will focus on the technology. Besides that, but we will also cater for Innovative
Technology arrangements which do not fall under the virtual financial assets or the
gaming, like for example: health, education, shipping etc.

Those, they can bring their technology arrangements
directly to MDIA for certification. We will support and regulate and the guidelines,
you know, for the systems auditor, but we will also directly certify other innovative
technology arrangements that come directly to us. After spending some time trying to understand
the government's perspective, we wanted to see what the business community thought about
the future of the industry here in Malta. So, I think that right now, in this kind of
slow period that we've had in 2018, it's been positive in the sense that it's allowed us
to build a solid foundation and to begin to prepare ourselves for the coming years and
so I think that we're well poised to take advantage of that. And despite the fact that it was slow in general,
I think that the future looks bright without a doubt.

I think the people generally are open to new
technology. There's been a big shift of gaming companies
coming here now, more blockchain companies. There are a number of companies here, but
we're aware of that it will accept cryptocurrency as payment. Some very simple shops as a jewelry shop that
will take bitcoin in payment and others. So they're starting to get used to the idea.

I am seven generation here. The business began in 1804 and have been selling
jewelry and watches for decades now. So we have started to accept cryptocurrencies
such as Bitcoin since last summer of 2018. And so far, we've got some successful feedback
from such clients potential clients you can say. Is the popularity of cryptocurrencies affecting
your business? Yeah, there's been high demand for many watch
pieces. Some other jewelry as well. It's going good, can't complain. From last year we accept cryptocurrencies,
you can buy VIP diving. We're gonna take you to the depths of Malta. Last year in November, there was a Blockchain
Summit in Malta. We saw two trips for submarine VIP diving
on this event.

So this was the first time we encountered
blockchain and cryptocurrencies in our business. To become commonly known as 'Blockchain Island',
Malta has organized several major crypto conferences. Delta Summit 2018 was one of the most successful
among them. The summit was born out of the fact that we
have regulated this new space. And we want to showcase to the world what
we've done in Malta, but also try to attract some of the world's best leaders, innovators,
pioneers, entrepreneurs and minds, and get them all under one roof to share their ideas,
insights, strategic foresight of how this industry is going to evolve in the next couple
of years. Show them what we've done, but also learn
from their valuable experience.

And at the same time create a structure where
businesses thrive and we can form some kind of B2B relationship between all of these companies
that are innovating in the blockchain space which was something that lacked at the time. It's part of Europe. A lot of the legal structures and financial
structures that need to be in place are in place. As you will have seen there's a lot of development
and building work around St. Julian's in Valletta. But the pace of life is a little easier than,
you know, some of the major financial centers. So if you want to concentrate and focus on
core activity with fewer distractions, we find Malta a very good place to be for that. What we have done is that we have looked at
our successful past experience of the gaming industry for the past 15 years and we have
emulated what we have done to this industry. There are basically two technological products,
two financial products in a way. And we have used that experience and implemented
it here as well. So it all sounds quite optimistic and we wish
the island luck. Meanwhile, the Megalithic temples continue
to stand.

They haven't changed for thousands of years. But around them – a lot has. Stay tuned if you want to watch more documentaries
like this. Like, press the bell and share this video
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