The cryptocurrency market in Europe hasn’t had an easy ride thus far. Skeptics claim that unclear regulatory laws and user anonymity make cryptocurrency a breeding ground for crime such as money laundering and terrorist financing. To counteract this uncertainty, digital currency brokers in Europe are now pushing for higher standards of regulation of cryptocurrency so they can more effectively work under clear circumstances.
The European parliament has voted to bring more transparency to the cryptomarket by enacting regulation laws that govern this new terrain. Many countries are implementing their own versions of these laws, with some being more advanced than others. Regulations are born out of the belief that cryptocurrency, if monitored correctly, has the potential to revolutionize financial markets and boost economic growth throughout the continent.
Leading in the effort to bring clarity to the cryptocurrency industry is the small island of Malta. On July 4, 2019, Malta officially passed 3 laws to establish a regulatory framework for Blockchain, cryptocurrency, and DLT (distributed ledger technology). These laws are the first of their kind, and focus not just on Blockchain and cryptocurrency but also address how brokers, exchanges, and traders operate within the cryptoindustry.
Prime minister of Malta, Joseph Muscat believes that regulating the crypto-industry is the way forward, and hopes that the tiny Mediterranean island will become a crypto-hub connecting east and west. The change has already made Malta a hot spot for crypto-business and is expected to spur economic growth and job creation. International Blockchain businesses are now flocking to Malta to set up shop, attracted by the low tax rate (as little as 5 %).
The new laws in Malta are as follows:
The first law (Malta Digital Innovation Authority Act) passed in Malta deals with credibility of DTL platform. This law was set in place to assure users that they are engaging with a legal and credible platform that is regulated by the government.
The second law (Innovative Technology Arrangement and Services Act) pertains to the establishing and exchanging of companies operating within the crypto market.
The third law (Virtual Financial Assets Act) is focused on the storage and exchange of the currency itself and covers regulation of wallet providers.
The revolutionary regulations passed by Malta have given the tiny country the nickname of “Blockchain Island’. The rest of the EU, however, has not caught up with Malta, and crypto currency regulations are still in development on the remainder of the continent. Although Malta is currently one of a kind in regards to their regulatory culture, it seems that some other countries in the EU are starting to mimic their actions.
Recently in Estonia a new law has been passed by the parliament under the title of Anti-Money Laundering Act and Terrorism Finance Act (2017). The new law outlines a clear definition of cryptocurrencies and new regulations of cryptocurrency wallets. Although the regulations do not fully cover the activities involved in crypto dealings, for example mining, the exchange and maintenance of a virtual wallet are now authorized.
Regulations of the crypto-industry have been constantly under review in European countries. Although progress may seem slow, important steps are being taken to bring certainty to a previously uncertain domain. As European governments begin to step in and regulate the digital currency market, risk is beginning to taper, and more users are beginning to engage safely with cryptocurrency.