International Monetary Fund Believes Blockchain’s Emerging Presence in Malta has Inherent Risks
It does not look like the International Monetary Fund (IMF) likes the Blockchain Island very much. Recently, the IMF has judged that the fast growth of the blockchain technology in the country of Malta can be deemed dangerous for terrorism financing and money laundering.
According to the IMF, the creation of the sector in the island, which has a citizen-by-investment plan and is very isolated from the world, can be troublesome. After visiting the Blockchain Island, the IMF is concerned that the lack of care from the government, aligned with the lack of regulation for cryptos, could be an international issue.
You should know that last year Malta passed three blockchain laws which were set to spearhead the innovation in the country and to create a transparent framework for crypto companies to start their business there. The Prime Minister of Malta, Joseph Muscat, is decidedly a crypto fan and has endorsed cryptos in several situations before as the “future of money”.
The Problem With Malta, According to the IMF
The main concern of the IMF on the island is that the government will be too lenient and that anti-money laundering measures are not going to be taken properly to ensure that all the businesses in the island are compliant.
In fact, most companies seek Malta mostly because it does not have harsh legislation, so it would probably not be a popular move for the country’s government to start to make its legislation stricter and more in line with the international regulations.
According to the IMF, Malta authorities would need to apply more sanctions and be more strict to the industry to close any regulatory breaches that could help investors to launder money from other countries.
The official report was concerned and warned that the increasing number of companies set in the country and the fast development of their financial products could put a considerable strain on the Malta Financial Services Authority.
Apart from the new crypto industry, the IMF is also concerned about the real estate market in the country. However, it deemed that Malta is, nevertheless, a country with broadly favorable prospects for the future.
Recently, the IMF also visited the Marshall Islands. At the time, the fund advised it not to issue its own national cryptocurrency, again, with money laundering concerns.
It seems that the fight of the IMF against money laundering is harsh. However, maybe the fund should be more concerned with traditional banking, which historically launders a lot more money than people are able to do with cryptos.