Battle of the Jurisdictions – Malta takes on Zug
An exciting debate straight out of the Blockchain Conference
by Gerald Fenech
Switzerland has an excellent reputation for low-taxes, a business friendly environment and excellent quality of life. All these qualities make it an attractive destination for start-ups. However the banking sector remains reluctant and cynical to open its door to distributed ledger technology and the like.
Only a few of Switzerland’s 250 banks ever allowed these companies to deposit the cash equivalent of cryptocurrencies raised in digital fundraisers known as initial coin offerings (ICOs). Of these few banks who did provide services for this new industry, two withdrew their services leaving around twenty companies high and dry.
Despite starting strong, with Switzerland’s so-called Crypto Valley estimated to be worth about 44 million dollars, it is now scrambling to maintain its status as a front runner in this space. The Swiss Banking Association has issued guidelines for banks who wish to do business with DLT companies, however money laundering worries have not sufficiently been put to bed.
Malta would certainly like to market itself as ‘The Blockchain Island’, certainly it made waves when Binance relocated its headquarters to the Mediterranean gem in March. The CEO, Changpeng Zhao, expressed that he would like to aggressively expand operations in Malta creating some 2000 jobs locally, not to mention the tax revenues from these jobs, as well as living expenses if these jobs are imported.
The proof of the pudding is in the eating, and Malta is now moving towards creating a legislative framework in which this industry will operate. This takes the form of three bills at present: the Virtual Financial Assets Act, the Malta Digital Innovation Authority Act and Innovation Technology Arrangements and Services Act. Binance is far from the only one, with Neufund and OKEx also settling on the island. Malta’s Prime Minister, Joseph Muscat also goes one step further, and sees the archipelago as a pioneer for change and eventually the EU will be known as “the Bitcoin Continent”
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