In June of this year, the Maltese government announced a rental reform that would include all rental contracts being registered on a system that uses blockchain technology.
The decision along with a number of other important changes requires that each rental contract for a commercial or residential property must be hosted on the blockchain platform. This means that once a document is submitted to the system, it cannot be removed or edited by any individual.
This is an important step, especially in terms of further consolidating Malta’s position as the Blockchain Island. Prime Minister Joseph Muscat said at the time that this important step will protect tenants and landlords from being abused as only authorised individuals will be able to use it.
The proposed rent reforms were approved by cabinet and are set to be implemented as we move into 2020, but how could such a system work?
The rental industry in Malta has struggled for years with many tenants complaining they do not have contracts or that terms are changed, or not adhered to after they sign.
By registering all contracts on the blockchain or similar distributed ledger technology, it provides a higher level of security by ensuring only approved people can access the records and it prevents records being tampered with in any way. In addition to this, using distributed ledger technology prevents there being any possibility that there could be contracts in place for something that there is no record of.
As well as providing benefits for landlords and tenants, the adoption of this technology helps boost the adoption levels and perception of this technology. Its application in everyday life is a big step and Malta is set to be the first country in the world to introduce a system like this at a governmental level.
Malta took its first steps into blockchain and crypto in July 2018 when it introduced a set of regulations that would apply to the blockchain, cryptocurrency and associated technologies. Electronic money, virtual tokens, financial instruments, virtual financial assets, and other emerging technologies were, through these regulations, given a path to legitimacy.
Malta’s tolerant and supportive regulatory environment, EU Membership and educated workforce already experienced in innovative industries, helped to create the perfect setting for blockchain and crypto to flourish.
This latest development for Malta’s rental industry has also been complemented by the announcement that all educational certificates will be stored on a blockchain as well. All schools including state, private, secondary, primary, church and independent, as well as universities will store their pupils’ certificates and diplomas on an immutable blockchain platform
BDO Malta has fully embraced Malta’s steps into the blockchain and cryptocurrency industry. As approved Virtual Financial Asset agents and we offer full blockchain and VFA advisory services as well as assistance with ITOs, setting up exchanges and crypto-trading platforms, corporate structures for blockchain-related activity, and managing applications for applicable licenses.
With a dedicated and experienced team on hand, we are here to help you make the best of this dynamic industry in Malta.
Learn More about BDO's Blockchain Advisory services today.
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