The ambitious “Blockchain Island” project devised in Malta appears to have fallen into a stagnation phase. The main reason behind this could be the refusal of the country’s retail banks to participate in joint work with technology companies.
The lack of innovative vision on the part of traditional banks has been the main obstacle, explained the Minister of Finance and Employment, Clyde Caruana. It is an attitude that he describes as “lack of will” in the face of new technologies that could open the doors of the future to the small nation.
Malta is an island located in the Mediterranean Sea, between Sicily (Italy) and North Africa. Its main source of income is maritime trade and tourism. The latter focuses on the rich ancient history of the island. However, both businesses were hit hard in 2020 due to the COVID-19 pandemic.
Why does the bank not want to participate in the Blockchain Island project?
The statements about the state of stagnation of the “Blockchain Island” project were offered by a minister in a local medium. He highlighted the conservative nature of the island’s financial centers and explained that the success of the project depends on the participation of the bank.
However, these institutions must be fully convinced of the feasibility of the project, otherwise they will not show interest. In that case, few technology companies have managed to partner with banks in the country to advance this ambitious work.
In the interview, Caruana showed a lot of pessimism regarding the project and mentioned that it is probably a closed chapter. «There will always be potential to carry out the project. But if we want to make it a reality, we must work harder and banks must be convinced that it is something that can happen.», He stressed.
Another fact that increases pessimism regarding the feasibility of the “Blockchain Island” project is the increase in restrictions on banks. In that sense, many of the financial institutions reject cryptocurrencies amid an accelerated momentum in the fight against money laundering in Malta.
Banks feel threatened
Other aspects that could play against the “Blockchain Island” project is that banks could feel intimidated by what the Blockchain represents. This is accentuated by the position of some companies related to this technology, which do not hide their intentions to overthrow the old centralized financial system.
But the reactionary role of Maltese banks is not only expressed in their reluctance to work with Blockchain technology. In other sectors, their refusal to participate has also been felt, which could mean for the Island, lagging behind in technological terms with respect to other nations.
Recently, in Malta, some emerging industries presented a project to support research related to medical cannabis. In that case, in the same way, the bank showed more than disinterest, a contrary attitude.
At the same time, the minister affirmed that another factor that plays in favor of the omnipotence of the banks on the island is the lack of local skills. Companies dedicated to the development of Blockchain technology could be more independent if there were a technologically trained workforce within the country, he explained.
Regulations remain favorable
The “Blockchain Island” project, despite its weak state, still has its doors open. It should be remembered that, in 2018, the country’s parliament passed laws favorable to the development of Blockchain and other futuristic technologies.
With that advance, the offices of major exchanges and companies related to cryptocurrencies were established on the island, including Binance and OKEx. However, at the beginning of this year 2020, it was known that the outgoing government did not grant even a license to these crypto companies.
The new executive who has governed the island since then, has given his word to remain friendly with this technological environment. However, progress has been slow. In this way, Malta, from being one of the most promising countries in the area, is now one of those marching in the last row.
Data to take into consideration
- The ‘Blockchain Island’ project in Malta could be doomed due to banking apathy.
- The country’s finance and employment minister, Clyde Caruana, was pessimistic about its future.
- Banks might be fearful of rhetoric from some Blockchain companies. They openly profess their intentions to overthrow the bank.
- It is not the first time that the country’s financial institutions have played a negative role in diversifying the island’s industry.