Malta Financial Services Authority Issues Consultation Paper on Security Tokens

Malta Financial Services Authority Issues Consultation Paper on Security Tokens

The Malta Financial Services Authority (MFSA) has just issued a report on security token offerings. The consultation paper is meant to be a recommendatory outline to better the regulatory framework in the small nation.

The MSFA has put out a report which is in line with its Vision 2021. The paper details the security token industry and how to best approach the STO question.

Malta is a highly-developed nation and relies on capital markets and investment to sustain its economy. This is why the MSFA has taken a strong interest in security tokens because it believes they will lead to greater private sector innovation, investment, and growth.

In 2018, the MSFA released its Fintech Strategy and Virtual Financial Assets Framework. This consultation paper expands on these ideas and seeks to bridge the gap between traditional securities and tokenized securities. Of course, the paper is meant to be a consultation; this means it is open to the public with the goal of obtaining stakeholders’ views to better create policy initiatives. The topics covered include investor protections, integrity, stability, and lessening risk. Overall, Malta is seeking to build a friendly atmosphere for the cryptocurrency space and only seeks to intervene in cases of fraud and abuse.

The consultation will be open to the public until August 30, 2019.

A Future Security Token Hub?

Last year, Maltese exchange LXDX announced its plans to host a fully-compliant security token offering. The exchange was started by a former engineer at SpaceX. Other efforts in Malta, such as security tokens pegged to gold, are also actively being pursued by the Malta Digital Exchange.

Overall, Malta is looking to be a prime destination for security token issuers. The small country is relying on the security token space as being one sector where the nation can stand out with its progressive regulations and openness to the industry.

Do you believe Malta will be one of the leading hubs for the security token industry? Let us know your thoughts below.

Image courtesy of Times of Malta.