The world’s largest cryptocurrency has found a new home on one of the world’s smallest island states. Prime Minister Joseph Muscat warmly welcomed the cryptocurrency platform and spoke of his desire for Malta to become “global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world class fintech companies”. Colleagues joined him in welcoming Binance and spoke of a desire for Malta to become known as “the blockchain island”.
Malta Bids to Become Blockchain Island to Switzerland’s Crypto Valley
If Zug in Switzerland is Europe’s crypto valley, Malta is bidding to come its island equivalent. The Mediterranean island, with a population of 450,000, is a major hub of banking and finance and is a global leader in the online gambling industry. On March 23, Binance announced that it would be moving its operations to the island, which is a European Union member. The cryptocurrency exchange, the world’s largest by trading volume, has been searching for a home after regulatory action in China, Hong Kong, and Japan forced it to look elsewhere.
Binance is seeking to introduce fiat payment facilities, and in Malta it has found a country that is plugged into Europe’s banking sector and rated by the IMF as having an advanced economy, placing it in the world’s top 32 countries. Binance explainedthat it settled on Malta “due to its existing pro-blockchain legislation and the stability that it offers financial technology companies through its regulatory framework.” The news comes on the same day that Japan’s Financial Services Agency published an order for Binance to cease its operations in Japan, stating that it was breaking regulations on funds settlement.
Malta Opens Its Doors to Crypto Businesses
Many European nations, such as the UK, have been sceptical of cryptocurrencies, and reluctant to embrace tech companies working within this burgeoning sector. While the British government has dragged its heels, going only so far as to commission a task force to “manage the risks around crypto assets”, Malta has drawn up a regulatory framework to encourage their use. It’s in the process of enshrining a Virtual Currency Act into law.
“Binance’s presence in Malta sustains our vision, that of making Malta ‘The Blockchain Island’,” said Parliamentary Secretary for Financial Services, Digital Economy & Innovation Silvio Schembri, joining his Prime Minister in welcoming the exchange. With Binance seeking to recruit 200 staff as soon as possible, the move will provide an instant boost to the island’s economy, and bolster its quest to become a center for crypto innovation.
“Binance will soon start a “fiat-to-crypto exchange” on the European island nation, and is close to securing a deal with local banks that can provide access to deposits and withdrawals,” said CEO Changpeng Zhao. He also encouraged other crypto businesses to follow Binance’s lead and consider relocating there. The move will be particularly beneficial to European customers, who should soon have another major exchange that will accept fiat deposits. Binance strengthening its grip on the market raises just one concern: if the exchange were to suffer a hack or technical problem, it could significantly disrupt the crypto markets.