A global leader in crypto regulation Malta is taking a very progressive approach to cryptocurrencies. Well, crypto is not a legal tender in Malta, rather they are established as a ‘medium of exchange, a medium of the unit, or a store of value.’
Malta, is one of the smallest island countries in Southern Europe, with 317 square kilometers of territory and 460,000 citizens. It is one of the richest states, having innovation-driven, advanced, highly industrialized, and service-based companies all over the globe.
The Maltese government enacted a trio of digital assets-related acts (MDIA, ITAS, and VFA) for the first time along with blockchain legislation.
Malta Crypto regulations 2022
27-04-2022: Malta becoming the Global Capital of Crypto.
The Blockchain Island is now turning its head towards the world of crypto in an effort to repeat its previous success. A lucrative tax incentive system, government initiatives, and clear and friendly crypto regulation are bringing fruitful results. Many large crypto exchanges, such as OKEx and Binance, have already established their headquarters in Malta.
Maltese Government on Cryptocurrency
As crypto exchanges in Malta are legal, the Maltese government defined a new regulatory framework in 2018 called landmark legislation for cryptocurrencies and addressed AML/CFT concerns as well.
The Virtual Financial Assets Act (VFA) bill is one of the Maltese crypto regulation bills which establishes a regulatory regime for crypto exchanges, ICOs, Brokers, wallet providers, advisers, and asset managers.
The VFA regulations were further accompanied by the innovative Technology Arrangements and Services Act, establishing a regime for future registration and accountability of crypto service providers.
The Maltese government also establishes the Malta Digital Innovation Authority (MDIA), which acts to create crypto policies, collaborates with other nations and organizations, and enforces ethical standards for the use of crypto and blockchain technology.
Crypto taxation in Malta
The cryptocurrency transaction in Malta falls under zero percent tax, holding Bitcoin and Crypto for any period does not also fall under taxation in malta.
Coming to Crypto trading, yes crypto trading in Malta falls under 35 percent business income tax in the country. And the tax may vary between 0% to 5% based on the income and residency of an individual.
2018 Fiscal guidelines of malta differentiate between Bitcoin and financial tokens equivalent to dividends, interests or premiums. The latter are treated as income and taxed at an applicable rate in the country.
Crypto Mining in Malta
There are no restrictions on exchange, mining, trading, and investing in Bitcoin in Malta, as it sees cryptocurrency and blockchain as evolving and promising useful technologies which must be promoted and studied.
Historical event on Crypto regulations of Malta
05-08-2020: Malta becomes the first country to regulate cryptocurrency. Malta signs three bills into law, they can be changed on the way people see and use crypto in the country. The three bills signed are Virtual Financial Assets Act, Multi Digital Innovation Authority, Innovative Technology Arrangement, and Services Act.
01-10-2018: Malta’s Prime Minister, Joseph Muscat, during the speech on blockchain and crypto potentials, called them an inevitable part of a digital future. Also said about setting up Malta as Blockchain Island.
The Maltese MFSA has indicated its strategic plans for the future regarding licensing virtual assets and cryptocurrency businesses. Also, working in order to address money laundering and other financial crime risks in the country.
The Maltese government has also planned and promised to focus on the integration of AI with crypto regulation. And may also implement guidelines specifically for token offerings security.