Bitcoin & Cryptocurrency in Malta?
The massive rise of interest in Bitcoin and Cryptocurrency in 2017 has not gone unnoticed in Malta - a tiny island in the middle of the Mediterranean. A country which is part of the EU, yet with rather Arab methodologies from a business perspective. "Too expensive", "give me the cheapest you have" and "apply a discount or I go to your competitor" are too common words one hears when doing B2B transactions.
Most of the interest in Crypto is generated by the mentality of locals who want to become rich overnight, instead of building a sustainable business; and are looking for the next Bitcoin to make a pittance of investment hoping to become into a millionaire by the same evening. Many do not even understand, and probably not even interested in knowing, about how Crypto works and its use.
Not a very positive introduction I must admit! However, this mentality is one of the main factors which is driving many upcoming skilled locals to leave the island, as well as a majority of expats who leave the island after 2 or 3 years from their arrival. I don't blame these expats, where they get the very common "If you don't like it, go back to your country" treatment.
Use of Crypto in Malta?
We are speaking about a country where eCommerce and Online Shopping is very limited to non-existant. There are several reasons, most of which are correlated to each other:
a. Corner Shops
Correct - most businesses can be classified as corner shops in Malta. They are usually family owned, and are not optimised to run properly. Usually, you get one person who covers multiple roles without actually possessing any accreditation or technical knowledge about the subject. They just operate through experience passed on by a friend or family member. The last thing they want on their plate is the maintenance of a website.
b. 'Save a Cent' Mentality
In plain English, Maltese will climb mountains to save a cent. Lack of investment in infrastructure can be noticed at national level. This is within most businesses as well, where they try to save and cut on employees, get the cheapest website available and have the most basic of PoS or Stock Taking system available (if any at all!).
c. Cut the Competition
In terms of price. If the opposite shop sells a pen 50 cents, I will sell it 49 cents. This combined with 'Save a Cent' mentality will attract the locals to my shop. So many shops don't want to put their prices in the open. You can even see it on Facebook Pages, where they post products without price. When you ask them for the Price through a comment, they simply answer "PMd". Sometimes you see like 100 comments the same. Why? facepalm
d. Resistance to Change
Yep - many Maltese show a lot of resistance to change, especially when it comes to technology.
e. Uncompetitive Prices
A Macbook which costs about 1,400 Euro from UK including shipping, costs 1,800 Euro from Malta. So businesses actually need you to come to the shop to have a sweet talking sales person put the shiny product in your hand and lock your sale through interpersonal skills.
One can go on, but I think by now you get my gist ... There are also other factors:
People simply prefer to pick up the phone and call, rather than establishing contact through digital channels (such as email). And I don't blame them actually, since many businesses either do not bother to reply or take a long time to do so. Some even go to the extent to ask you to either go to the shop or to give them a call!
Many transactions are still done using paper money or cheques. Yes, cheques!
This goes to question how a country which forms Bank queues on a daily basis, rather than using Plastic Money or Automated ATMs, can even be expected to transition to Digital Currency!
Maltese Government & Crypto
There is mixed signals coming from different Govt institutions. Whilst that the Prime Minister is in favour of integrating Digital Currency within the country, you get warning and caution signs from the Financial Institutions.
My conclusion about this is:
Malta's Economy depends on acquiring Foreign Investment to the country. At the moment, the Economy is booming as Malta has become a Mecca for setting up Gambling Companies. In turn, these are injecting a substantial amount of money into the economy. There is also the passport selling scheme which is again leaving money in Malta. Any Prime Minister knows that these are great political wins, but would also be wary that change in legislations either by the EU or other countries may form a more attractive package to such companies and scheme adopters. In turn, the portfolio of Foreign Investment channels should be diversified as much as possible. Digital Currency is still in its infancy, and with many countries and large corporations showing skepticism, this is an opportunity for Malta as a country to show positivie sentiment and create the environment to try to attract such investments.
Within the Government institutions, like in other countries, there are many traditionalists who do not understand what Digital Currency is. They are not willing to explore unchartered territories as they are afraid of loosing their daily bread. History shows that people who embrace change have thrived - people who resisted perished. So I hope that such Financial Institutions heed this signal.
Amid Malta's highly tense political situation (at time of writing) amid claims of corruption within Government institutions, many people are seeing the Government's embracement of Bitcoin and Digital Currency as a method to hide or launder money. Again, this is misconception! Digital Currency records all transactions and uses a decentralised system so makes it much more safe and traceable than traditional currency without the possibility of hiding such records. Again, this is another fault of Maltese mentality. Everybody becomes a judge and wants to comment on each and every subject without having the knowledge or expertise to do so. This can be easily seen from Football: when you hear the Maltese players speak you think they are a Messi or a Ronaldo ... their performance says otherwise - better stick to FIFA on Playstation guys!
Conclusion
My conclusion to this is very short, I believe that the push for Crypto Companies to set up operations in Malta will succeed if the Gambling approach is set up to attract foreign investment. However, the target niche will not be local. I do not believe that the use of Cryptocurrency will ever catch up in Malta with the locals. Sorry, but long way to go Malta people!
These are my two cents about the topic. This is a generalist view to the situation in Malta & Bitcoin. You will find open minded people who have indepth knowledge and businesses who are properly set up. However, I am quiet sure that these are a rare breed!
I am very interested in hearing your views about the topic, and please do not forget to upvote the article if you found useful!