The government of Malta has received cautionary notes from the International Monetary Fund (IMF) regarding its rate of blockchain and cryptocurrency adoption, warning that unchecked proliferation carries “significant risks” for money laundering and terrorism. during a recent financial assessment carried out on the island.
According to English daily The Times of Malta, IMF made this statement after a recent financial assessment carried out on the island. Reporting on the situational analysis put forward by the IMF, it said that the growth of blockchain in Malta has created significant risks of financial systems directed towards the likelihood of increased money laundering and financing terrorist activities.
Malta has in recent times been recognized as one of the leading countries in Europe and the world that has favorable policies towards the development of blockchain enterprises. The rate of development has set Malta on the map as one of the go-to places for anything blockchain and crypto-related businesses.
While efforts towards accelerating the development of the industry are being lauded, the IMF showed concerns about the supervisory system currently in place and suggested emphatically that the authorities should improve their understanding of the risks and employ adequate sanctions in case of breaches.
The IMF also thought there was a need for improvement in staffing and formulate a long-term guaranteed financial and operational independence supervisory system as according to it, Malta’s Financial Services Authority was experiencing strain in operation due to an increased number of fintech operators with extensive new products and evolving regulatory environment.
Malta’s declaration of being a blockchain island was underlined by its recently-enacted policies covering new technology and digital assets. This may have caused a positive development for the industry but also increased the risks involved that may result from a lack of proper oversight. The IMF assessment should enable the authorities to re-evaluate their current situation and ensure that the systems put in place are foolproof.
Perhaps, this development brought about by the IMF will also stir up other jurisdictions working towards harmony with the blockchain industry to further improve their policies and regulatory framework to ensure a healthy crypto ecosystem.
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