Crypto Firms In the 'Blockchain Island' of Malta Face Hurdles In Opening Bank Accounts

Bhushan Akolkar
By Bhushan Akolkar
Posted on March 3, 2019
Crypto Firms In the 'Blockchain Island' of Malta Face Hurdles In Opening Bank Accounts

Malta has emerged as one of the most favourite and go-to destinations for crypto and blockchain companies. Due to its blockchain-friendly policies, it is popularly called as the ‘Blockchain Island’ within the global community. 

However, according to the latest report by local news publication Times of Malta, crypto businesses are facing major hurdles in opening bank accounts. Several banks have rejected the applications by crypto companies until they don’t get an approved license from the Malta Financial Services Authority (MFSA). The banks told the firms that it was beyond their “risk appetite”. 

Yes for Blockchain Firms But No for Crypto Companies

Silvio Schembri, the Parliamentary Secretary for Financial Services, told the publication that although banks are willing to open accounts for blockchain companies, they stay reluctant for crypto firms. He said that a clear distinction needs to be made between blockchain and crypto firms. 

Schembri also said that they are actively conducting awareness campaigns with financial institutions in order “to have a better understanding of the industry”. He added:

“The general understanding is that when it comes to crypto operators, banks are waiting for operators to obtain an MFSA [Malta Financial Services Authority] license before opening their doors – which is understandable.”

It clearly shows that even if Malta is open to businesses in the growing FinTech sector, it won’t compromise on the regulatory front. Moreover, this scenario is quite similar in other parts of the globe. In comparison to blockchain companies, crypto companies have a higher risk involved considering the extremely volatile crypto market. 

However, in December 2018, Cryptoscanner reported that Malta is building a bank with dedicated services to crypto and blockchain companies.

Leveraging Blockchain Technology Across Multiple Sectors

In December 2018, Malta joined hands with six other European member states to promote the use of Blockchain Technology in the region. The document cites using the Distributed Ledger Technology (DLT) in the fields of “education, transport, mobility, shipping, land registry, customs, company registry, and healthcare”. 

In the case of cybersecurity, the MFSA recently released a consultation document stating that it will comply with international standards, along with the guidelines of the European Banking Authority. These guidelines specifically targeted issuers, agents, and service providers for Virtual Financial Assets Act (VFAA).

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