The Growth of Blockchain in Malta Created “Significant Risks” — International Monetary Fund Mission

The growth of blockchain in Malta created ‘significant risks’ of the financial system being used for money laundering and terrorism financing, stated an International Monetary Fund Mission.

The Maltese government recently enacted three pieces of legislation covering blockchain and cryptocurrencies as part of a national strategy to become ‘The Blockchain Island’.

As reported by BlockPublisher earlier, the three bills are:

Malta Digital Innovation Authority Bill announces the seriousness of the government to excel in the blockchain space. It will watch over governmental affairs regarding digital innovations.

Technology Arrangements and Services Bill sets precedent for the regulation of designated innovative technology arrangements and services.  Setting up of exchanges and collaborating with companies that operate in the crypto world fall under this bill.

Virtual Financial Assets Bill deals with regulation in the field of Initial Virtual Financial Asset Offerings, Virtual Financial Assets, and related matters.

The IMF mission wanted assurance that virtual asset service providers had fulfilled their anti-money-laundering requirements. They also commented that the administration needed to improve their understanding of risks and ensure that suitable sanctions were applied in case of misuse.

“The increasing number of financial entities under supervision, the rapid development of new products, the evolving regulatory environment and the tightening of the labour market have put the Malta Financial Services Authority under considerable strain,”

Overall, the mission graded the projects as okay and recommended more efforts to tackle growing challenges.