LEADING THE WAY

JOVAN GAVRILOVIC IS THE GENERAL MANAGER AT OKCOIN - A DIGITAL ASSETS TRADING PLATFORM. JOVAN OUTLINES HOW MALTA EVOLVED INTO A MATURE AND EFFECTIVE JURISDICTION FOR OTHER EUROPEAN NATIONS TO FOLLOW.

IIn late 2018, Malta made history by becoming the first country to regulate the digital asset and blockchain industry. The new bills, which went into effect on November 1st, were designed to grow the country’s economy while protecting consumers with appropriate government oversight. I’ve personally had the privilege of getting to know Malta’s blossoming blockchain community. It’s arguably one of the most energising innovation hubs in Europe, mostly thanks to the forward-thinking approach taken by its governing authorities.

Historically, some parts of the crypto market have resisted regulation, and governments around the globe are still struggling to understand and keep up with the relatively new, quickly evolving decentralised landscape. By taking the lead, the Maltese government has provided a model that the rest of Europe would do well to follow, even if it’s not a pointby-point adaptation.

Welcome To Blockchain Island

Malta’s digital asset and blockchain regulatory laws are comprised of three components: the Virtual Financial Assets Act (VFAA), Malta Digital Innovation Authority (MDIA), and Innovative Technology Arrangement and Services (ITAS) Act.

The VFAA outlines conditions that must be met by new cryptocurrencies launching in Malta, ensuring that any companies preparing ICOs must have proper documents that lay out the company’s future roadmap. This act also refers to ICO-issued tokens as virtual assets.

As summarised by Aberdeen, an intent-based marketing and sales solutions company, the Malta Digital Innovation Authority “has been vested with statutory rights and responsibilities of regulating the overall blockchain sector in the country. Its function has the highest authority and is the ultimate decision maker, as far the country’s cryptocurrency and blockchain activities are concerned.” In other words, this is the group responsible for formulating guidelines, which blockchain companies are required by law to follow.

Then there’s the ITAS Act, which defines all terms related to blockchain, digital assets, and distributed ledger technology. This will help with setting up exchanges in the marketplace and making sure they’re compliant with Malta’s new bills.

Innovation Through Regulation

Old-school blockchain supporters might balk at the idea of the technology being so strictly regulated, but these laws are actually designed to encourage innovation in the industry, not stifle it. Through regulations, digital assets have become a legitimate, government-recognised form of currency. As Malta’s Prime Minister Joseph Muscat told Forbes last year, “I think that blockchain technology, DLT, and cryptocurrency are where innovation is happening right now and we are very glad that Malta can offer the first jurisdiction in the world to regulate this sector.”

Without guidelines in place, people on both sides of crypto exchanges can be put at unnecessary risk. ICOs, in particular, carry a huge risk factor; as pointed out by Hackernoon, as of November 2018, more than 50% of ICOs stopped operating within four months of launch. Some countries even banned initial coin offerings outright, while security token offerings have emerged as a safer alternative, although still largely unregulated.

Instead of simply shutting down ICOs, however, Malta has found a way to legitimise them while ensuring that they follow common-sense guidelines to protect all parties. Its innovative approach looks at the technology behind white papers typically submitted, rather than focusing on the papers themselves. “If we think about an issuance of an ICO, operators typically present a white paper with the ICO details. While other jurisdictions are looking at the white paper to see if it’s certified, it’s the technology behind that white paper that implements what is written,” Malta’s Junior Minister for Financial Services, Digital Economy, and Innovation, Silvio Schembri said.

The government’s attitude towards and comments about cryptocurrency make it clear that Malta wants to encourage the industry, not stifle it, as some detractors feared. Its Prime Minister even called it “the inevitable future of money.”

Why The Rest Of Europe Should Follow Suit

Now that Malta has taken the initiative and secured its place as a blockchain haven, it’s time for the rest of the continent to follow its lead. As investors move throughout the EU and companies expand their reaches, they should be protected by the same rules across borders.

It is also in Europe’s economic best interest to embrace the digital asset industry with consistent and robust regulations. Several months after the announcement of the Malta bills, investors flocked to the island in droves for a massive Malta Blockchain Summit, where I had the pleasure of sharing my insights about this rapidly developing ecosystem. From my conversations with industry professionals and entrepreneurs, it is evident that more companies are making their homes in Malta, which means more job opportunities for the local community. Not bad for a country estimated to have fewer than half a million residents! For us at OKCoin, we are witnessing the enthusiasm and commitment to foster a productive and inspiring ecosystem, aimed to bring Malta to the forefront of global innovation.

Malta has shown the world that clearly defined regulations can help increase awareness and legitimacy of the crypto industry. If nearby countries decide to take similar measures, it will go a long way towards fulfilling Malta’s prediction about the future of digital assets. We at OKCoin will be watching closely with great anticipation.

JULIET ADELSTEIN IS CHIEF OPERATING OFFICER AT G8C. SHE SPEAKS TO KATY MICALLEF TO SHED SOME LIGHT ON THE FAST-PACED EVOLUTION OF THE BLOCKCHAIN SPACE AS IT COLLIDES WITH THE ONLINE GAMING WORLD.

THIS IS THE FIRST VIRTUAL FINANCIAL ASSET PARTNERSHIP BETWEEN MALTA AND JAPAN, WHAT MADE MALTA SUCH AN ATTRACTIVE CHOICE WHEN IT CAME TO CHOOSING A COUNTRY TO ESTABLISH YOUR PROJECT?

To be completely honest with you it was an absolute no brainer for Ganapati, everyone was in agreement from the very first moment – Malta is the place for us.

Of course, we were already established in Malta; we’ve got our gaming licence and offices here, and have built some very important connections and relationships. That aside, it was the direction that Malta was going in, rewarding people who are trying to bring something different to the island, and the feeling that the entire island is moving in this very fast, forward-moving direction towards trying to do something new around the blockchain space. We found it a very collaborative experience from the very beginning.

Many of the ideas our products are based around have changed and been adapted the more we speak to the whole blockchain community, particularly in Malta. That’s what

I personally find invigorating – it’s a very open community, no one is trying to keep their knowledge to themselves. The more we help each other out, the more the entire industry grows and the more everyone gets out of this experience. This is something I think we could only have found in Malta.

THE G8C TOKEN BRINGS AN ENTIRELY NEW APPROACH TO ONLINE GAMING. HOW WILL THE ONLINE GAMING SPHERE EVOLVE AS IT COLLIDES WITH THIS DISRUPTIVE NEW TECHNOLOGY?

It’s very important for the gaming industry to stay on top of what the players want. We do a lot of research into that, especially because we have operations in both Asia and Europe, and they are two completely different markets. As we make one product for both markets, it’s important for us to find similarities between them. One problem that kept coming up across the board with casino users was this idea of trust – or lack thereof, and it just seemed that no matter how many times everyone in the industry told themselves that things were regulated and that there were strict policies, the players themselves didn’t believe it.

The solution was transparency – which led us to blockchain. The opportunities and advantages that blockchain provides, not just to the players, but to the operators, platforms, aggregators and game developers like us, are endless. We’re looking into things like having an offline playing function, zero transaction fees, automatic withdrawals – all of this on top of providing full transparency to our players. These are things that until blockchain existed weren’t really a possibility. With blockchain, not only does a brand-new platform emerge, but so does this new idea of having a token you can use directly on your online casino – linking a virtual financial asset to the blockchain platform through a very seamless system and rhythm. What emerges is a complete package of a token and blockchain platform made specifically for online casinos. And the more we all move in this direction, the more advantages for both the iGaming and blockchain industries. The iGaming industry is incredibly forwardthinking, so there are going to be things that we start realising that other people in the blockchain sphere haven’t yet, and vice versa. I think the two industries are going to begin balancing each other out and pushing each other further and further up.

THE TOKEN DESCRIBES ITSELF AS A NEW FORM OF STABLECOIN, A FIRST FOR THE IGAMING INDUSTRY – IS MORE MAINSTREAM ADOPTION ON THE CARDS DO YOU THINK?

Without a question of a doubt, I believe that’s the direction things are going in. We’re talking about decentralised systems where what was previously the status quo no longer has to be. Who is to say that in this new direction we’re moving in, a virtual financial asset can only be stabilised to a fiat or other currency?

Specifically as Ganapati and G8C, with so many contracts with operators and platforms around the world, we have some understanding of how many players will potentially be using our G8C token, so we are stabilising our token to players and their future bets: one G8C will always equal one minimum bet. I think the idea that you can peg a token’s value to something other than a fiat or financial asset will definitely start to emerge more in the future when considering what constitutes a stablecoin. There are countless other factors in life which are stable and that a token’s value could theoretically be stabilised to – this is a really intriguing concept to us.

ARE TOKENS CONNECTED TO ICOS LIMITED IN THE VALUE THEY CAN OFFER INVESTORSWHAT’S YOUR OPINION ON THE RECENT SHIFT TO STOS?

As far as G8C is concerned, we agree entirely that there was a considerable amount wrong with the ICO “concept” up until now, so we personally refer to ourselves as an “anti-ICO”. We firmly believe that launching a token simply to watch the value be traded rather than the token having any actual use is nonsensical. That being said, the overall feeling across the board at G8C was that while things weren’t going in quite the right direction, it wasn’t far off and shouldn’t be given up on yet.

Does simply changing the letters of an abbreviation around really solve the problem? Personally, I don’t think so. In that sense, there are going to be STOs that don’t provide the security that they’re claiming to. People are going to run into problems, exactly the same problems that they did with ICOs. The further we go down the track, however, the more we start to see what doesn’t work. What this has meant is that the people out there launching ICOs or STOs are having to prove themselves a lot more now, they are having to show that they’re legitimate and that they have a real product, and to provide constant reassurances to their investors. Mistakes from the past have meant we’re now coming into a really exciting era – what remains are the teams who truly have something special and are bringing something to the table that has the potential to change the world.

IS THERE ANYTHING NEW IN THE PIPELINE THAT YOU’D LIKE TO SHARE WITH BLOCK MAGAZINE?

G8C is currently in the middle of a world tour, taking our concept to different markets, sharing ideas and meeting different people in the industry. We’re already finding that the focus and direction is quite different everywhere we go. Just the experiences and the variety of people we are being exposed to by going on this extensive tour are really exciting. Whilst our base plan for what G8C looks like is decided and won’t change, there’s inspiration we’re picking up from everywhere we are going, that we continue to add to the mix, so that is something extremely exciting for G8C this year.

We have recently attended blockchain events in Turkey, Malaysia, Hong Kong, Singapore and Manila, and coming up we have the Malta A.I. and Blockchain Summit in May, which we’re obviously very excited about. We were present there in November, but we weren’t the G8C that we are today and of course looking at what the AIBC Summit will be like in May, the AIBC Summit then wasn’t what it is today either. We’ve gone through a very similar growth rate in a very similar time frame, so it’s going to be fun to continue to embark on that journey together.