Within the coming months, the Maltese Government will be launching a paper for consultation on a new form of legal personality, specialised for entities that make use of or depend on Distributed Ledger Technology (DLT).
This was revealed by the Malta Digital Innovation Authority (MDIA) CEO Stephen McCarthy on the second day of the DELTA Summit.
Debates on legal personality concerning technology arrangements are not new with Senior Partner at Ganado Advocates, Max Ganado, believing that DLTs should be treated as software arrangements – “an atypical type of asset which can be construed as the basis of a new type of legal person”.
Mr McCarthy laid out the challenges which the MDIA has faced over the last year.
“Our objective was setting up a framework to ensure quality and dependability of DLT based systems through technology certification processes, with the support of MDIA accredited system auditors,” he said.
Remarking that this was no easy feat, he observed that the MDIA “Being the first of its kind, we had to build the framework from the ground up without models or best practices to compare it to, while also dealing with public perception and demystifying what we do here at the MDIA.”
He stressed the message which the MDIA has been focussing on since its inception, that cryptocurrencies are but one application of blockchain and DLTs.
“The purpose of the technology is much wider and it would be a mistake to build an identity and regulatory framework merely as users of a single technology application. That is one area where we sort of diverted from the mainstream and Malta took a particular approach by concentrating on technology. Our major challenge this year was explaining that blockchain and our regulatory role is not limited to cryptocurrencies.”
He stressed that the MDIA is position itself as “enablers of safe and dependable technology”.
Mr McCarthy spoke of “a considerable shift of DLTs backed by a sound business model”.
With the hype surrounding blockchain having been compared with the ‘dot com’ bubble, over the past two years there have been companies around the globe claiming to apply blockchain technology to their business in order to reap the short-term monetary rewards from the blockchain buzz.
Mr McCarthy contends that situations such as this “are on steep decline as companies face more rigorous regulation”.
He cautioned that this does not mean “the hype is over”, but that “more and more financially successful projects are deeply grounded in the reality of DLTs as an important tool”.
Mr McCarthy closed off his speech by discussing the benefits of having an independent systems audit certification for DLT platforms, claiming that the MDIA “anticipate[s] more users will prefer or demand certification, or at least a systems auditor opinion”.