Cryptocurrencies: Not legal tender Cryptocurrency exchanges: Legal, regulated under the VFA Act
Malta has taken a very progressive approach to cryptocurrencies, positioning itself as a global leader in crypto regulation. While cryptocurrencies are not legal tender, they are recognized by the government as “a medium of exchange, a unit of account, or a store of value”. Malta has no specific cryptocurrency tax legislation, nor is VAT currently applicable to transactions exchanging fiat currency for crypto.
Cryptocurrency exchanges are legal in Malta and, in 2018, the Maltese government introduced landmark legislation to define a new regulatory framework for cryptocurrencies and address AML/CFT concerns. The legislation comprises of three separate bills, including the Virtual Financial Assets Act (VFA), which set a global precedent by establishing a regulatory regime applicable to crypto exchanges, ICOs, brokers, wallet providers, advisers, and asset managers.
The VFA regulations (effective from November 2018) also introduced the Innovative Technology Arrangements and Services Act which established the regime for the future registration and accountability of crypto service providers. The Malta Digital Innovation Authority was also established: going forward, the MDIA will be the government authority responsible for creating crypto policy, collaborating with other nations and organizations, and enforcing ethical standards for the use of crypto and blockchain technology.
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