Malta has been in the forefront of blockchain adoption in Europe. It is not surprising that the nation is leading a renewed quest to develop an European blockchain initiative.
On December 4, Malta and six other European nations met to harmonize a blockchain policy forming what is known as the “Mediterranean Seven”.
The countries involved in the move include France, Italy, Spain, Greece, Portugal, Cyprus, Malta had the countries sign an agreement to work on the development of modalities for the implementation of the distributed ledger technology policy among the countries.
Greater Interest for Europe
It is expected that the initiative will act as a catalyst to spur greater interest and adoption in Europe which has been lagging behind in terms of regulations and adoption of cryptocurrencies, the most apparent utility for the blockchain technology.
However, the focus of the group is not necessarily the promotion of cryptocurrencies but blockchain technology, the underlying technology on which cryptocurrencies are built on.
The objective of the initiative is to to advantage of the technology and enhances efficiency within the southern European region.
A release by the group highlighted are in which blockchain can be applied such as in
“education, transport, mobility, shipping, Land Registry, customs, company registry, and healthcare” that can be “transformed” with the use of DLT, whose supporters say offers more stringent privacy protections for citizens and can impose less bureaucratic burdens on government’s providing “e-services”.
The report by FT said that the consensus among participating countries
“This can result not only in the enhancement of e-government services but also increased transparency and reduced administrative burdens, better customs collection and better access to public information”
Malta Leads In European Blockchain Adoption
The initiative spear-headed by Malta is not surprising. The country has been among the most crypto-friendly and has made national policies that have promoting blockchain related investments passed into law. It has also advanced tax rebates for the industry and has been attracting fintech startups.
Among these is Binance, the world’s largest cryptocurrency exchange that moves to Malta due to its flexible approach to crypto regulations.
It is expected that the involvement of Malta in the initiative will spur a more positive outlook for cryptocurrencies that most European states have not taken serious stance upon.
G20 Interested in Blockchain
It will be recalled that the G20 Summit this year raised the issue of cryptocurrency regulation. These 20 largest economies would want the market to be more closely monitored and regulated. The absence of regulation of the cryptocurrency market is the primary reason many institutional investors are skeptical about it.
Silvio Schembri, who is Malta’s innovation mister and has played a vital role in transforming Malta to the “Blockchain Island,” said:
“Malta is the first world legislator to offer a regulatory environment for all blockchain technology. We are not only interested in cryptocurrencies.”
Blockchain is the technology on which crypto currencies are built on. It is protected via nodes that are decentralized. This means that they are located independent of one another in different parts of the world.
Decentralization Means Miners Must Be Compensated
Its decentralized system makes it difficult if not impossible for one government or entity to control the blockchain. These are some of the issues that the seven countries are putting into consideration as they map out modalities for blockchain implementation policy guiding their agreement.
To successfully operate a blockchain network, the nodes or miners will have to be compensated. This is where cryptocurrencies will have to come in once more.
The implication is that the initiative will have to incorporate digital currencies if the countries are building a blockchain network to make for tamperproof, efficient and inalterable record system.
Native Cryptocurrency for the Blockchain
It is apparent that as these countries explore the potentials of blockchain, the effects of the collaboration will include native digital assets and currencies as well as the need to regulate them.
It will be a classic case of regulation of a decentralized network, a model that other countries and regions may adopt in future.
As the group explores the potential of the blockchain and begins integrating it into various areas of the European economy, native digital assets could naturally come around and consequently, the European nations could integrate more practical regulatory frameworks pertaining to the asset class.
Among the countries, France is another that has shown interest in creating a crypto policy. The country’s finance minister had months ago jointly proposed with his German counterpart that digital currency policy be adopted by the G20 nations.
At the time, France’s Finance Minister Bruno Le Maire said that the government hopes the newly established legal framework for ICOs will attract investors from all around the world.
The Europeans have been struggling in terms if crypto market share since Malta and Switzerland are among the few that have made serious effort at creating enabling environment for the industry.
The global crypto market has been dominated by the US, Japan and South Korea while Singapore, Switzerland and to some extent Malta have attracted most blockchain startups .
Apart from Malta and Switzerland, most of the Europe’s regional cryptocurrency markets can barely be compared to Asia and the U.S.
This European blockchain initiative could just be what the Europe is waiting for ignite interest in the industry.