Can Malta Get A New Blockchain Sandbox?
- Malta’s Digital Innovation Authority (MDIA) proposes a new regulatory sandbox
- Document suggests extension to blockchain regulation to help small operators
- Sandbox suggested to ease certification of “Innovative Technology Arrangements” that include Blockchain, DLT and smart contracts
- Feedback to the proposed document must be submitted until July 31st
- The document can be found at the end of the article
Has the blockchain Island sunken like Atlantis? Or is the wind turning, blowing new ideas towards the small Island in the mediterranean sea?
The MDIA has just published a consultation document to propose an extension to the existing regulatory framework. If Malta reworks it’s pricey framework through adding a sandbox extension, operators that have lost interest in the past, might come back for a visit very soon. Feedback to the consultation paper is welcomed from operators and industry members.
“This document seeks feedback from the industry and various stakeholders on a proposed Technology-Driven Innovative Technology Arrangement Sandbox, complementing the Malta Digital Innovation Authority’s (MDIA) full certification of Innovative Technology Arrangements (ITAs)”
The MDIA is active to consult the government and Maltese regulatory bodies as well as the local industry. Under the lead of Joshua Ellul the new sandbox proposal is attempting to improve and ease the MDIA’s certification process for fresh applicants. An extension to the framework would possibly shape the attractiveness and overall quality of Malta’s regulatory approach. Ellul, a researcher and scientist at heart is considered and optimistic that highest quality is what ultimately scores in this competitive landscape.
Whether regulation is a relevant step towards hyperbitcoinization or not, is without a doubt something that only time can tell.
“Regulatory ITA Sandbox: Driving PrinciplesA regulatory sandbox for ITAsshould build upon the strengths of the current certification process which MDIA is responsible for. The underlying principle is to ensure that recognised technologies have undergone an independent third-party audit by system auditors licensed by the the Authority, providing user and investor assurances regarding adequacy of technology, risk mitigation processes, etc., all performed against well-defined control objectives. In addition, legal certainty is also provided through requirements such as the appointment of a Technical Administrator legally bound to report and act in case of legal violations, and the requirement to have a forensic node to keep an audit log of the underlying system’s operations and transactions, thus supporting investigation.The key element in the design of a regulatory sandbox framework is the identification of which regulatory burdens can be reduced or modified, and which cannot during the sandbox phase. Although flexibility of the framework can be a key success requirement, it is crucial to define the limits of the sandbox approach to give value to operating within it. In keeping with the ethos of ITAS certification, the non-negotiable aspects of the ITAS sandbox should include:1.Independent third-party auditing of certain aspects of the processes, technology and operations. 2.The design and setup of a Forensic Node to record all relevant activity which is available to the Authority and for future auditing. 3.Legal obligationsarising from national legislation or due to other national authorities.”