The plans of the Malta authorities to turn the island into a global blockchain hub may break on the unreadiness of the financial system to cooperate with cryptocurrency startups. According to market participants, the banks of Malta hardly open accounts for crypto companies.

Dozens of companies working with blockchain and cryptocurrency registered legal entities in the Maltese jurisdiction thanks to the desire of the local government to turn the island into a global technology center. But they faced resistance while trying to open bank accounts. According to Times of Malta, citing sources in crypto companies, banks politely refuse to do business with cryptocurrency startups, explaining their reluctance by high risks associated with the crypto industry. The Maltese banks hardly see the difference between cryptocurrencies and blockchain, so they refuse to open accounts even to those startups that develop blockchain solutions and do not totally rely on cryptocurrencies.

Parliamentary Secretary for Financial Services Silvio Schembri confirmed that the problem with banks really exists, but clarified that it affects more heavily cryptocurrency service operators, and not companies developing blockchain solutions.

“One should make a clear distinction between blockchain operators and crypto operators,” Schembri said, adding that he is in contact with banks to help them “to have a better understanding of the industry”.

Many banks refuse to open accounts for crypto companies until they receive a license from the Malta Financial Services Authority (MFSA) as agents of virtual financial assets in accordance with the Malta Act on Virtual Financial Assets. Since the end of November, MFSA received 28 applications from crypto companies wishing to be registered as VFA agents.

According to Schembri, MFSA also received applications for private initiatives proposing the foundation of innovative banks.