Malta Has Become The World’s Cryptocurrency Hub

Malta is attracting some of the world’s biggest exchanges. This is because of the country’s attractive regulations towards the cryptocurrency sector. Malta’s Prime Minister, Joseph Muscat, says that the country is the global trailblazer in the regulation of cryptocurrencies. The leader shares their success comes from the country becoming a member of the European Union Blockchain Partnership. Also helping are the latest crypto bills adopted by the country’s parliament.

The bills give Malta Financial Services Authority the regulatory power to publish, and even monitor, while enforcing rules on digital currencies. The authority’s tasks include certifying blockchain platforms while ensuring the credibility and provision of legal assurances when it comes to digital currencies. The bills also provide a framework to ensure that registration of technology service providers while clarifying technological arrangements and conducting audits on various platforms.

A Lack Of Regulation

Digital currencies are currently unregulated by Malta laws and exchange companies receive the same treatment as commodity trading platforms. The current rules state that a company utilizing digital currencies does not need to have a license from the Malta Services Authority unless it operates as a collective investment scheme or a financial service provider. Additionally digital currencies are not considered as investment instruments under the Investment Services Act. Therefore, they do not trigger licensing requirements which fall under that act.

Malta also does not have a tax legislation regulating digital currencies as a medium of exchange. The tax comes when there is a habitual sale of digital currencies, or when the length of crypto ownership is very short. Under such circumstances, income is subject to tax at 5%. Malta says that the EU will not influence how they treat digital currencies or even how they tax them.

This does not mean that US citizens who use Maltese exchanges will not be subject to taxation. They should note that US tax obligations include Foreign Account Tax Compliance. Those obligations will require them to file their returns as the law states.

Many exchanges view Malta as the best country to run their crypto businesses from. The country appears to be making its laws attractive to investors so that they will invest more in the country.