Cryptocurrency : the Maltese financial services industry’s perspective

Abstract

This research investigated the perspective of the Maltese financial services industry on cryptocurrencies, both on a national and international level. Prior to this study, few research was conducted with regards to cryptocurrencies in a Maltese context. Semi-structured interviews were conducted with a number of participants selected through purposive sampling. Research sample included key participants from the Maltese regulatory body, the financial services industry, including banks and investment firms, and also financial and technology law practitioners. The interviews were analysed and comprehensive themes were drawn, which highlighted the perspectives of the participants. The results obtained from the research revealed that cryptocurrencies are perceived as a step in the right direction for a more technological financial industry. However, it was also identified that the lack of regulation is one of the main challenges for the adoption of cryptocurrencies. While the research showed that most professionals in the Maltese financial industry hail cryptocurrencies as a major financial innovation, the study also revealed that the virtual currencies’ most common underlying technology, that is blockchain, is perhaps a more fundamental innovation due to its potential applicability in a number of financial and non-financial services. These findings suggested that cryptocurrencies, as at the time of this research, are not yet perceived as an alternative for traditional fiat currency, let alone replacing it. Moreover, the study findings suggested that the general public perceives cryptocurrencies as a trading investment, rather than actual currencies. It can be concluded that although cryptocurrencies have a number of important characteristics that might be of benefit to the financial industry, regulation which focuses on transparency and the protection of consumers is required in order for the public to feel safe in adopting cryptocurrencies.