PKF unveils the concept of Bitpod | PKF Malta

Last year, Malta took the bull by the horns and plunged ahead into the sensitive area of virtual financial assets (VFA) completely oblivious of the bearish mood that gripped the crypto market.

The heady days in 2017, when Bitcoin reached peak trading at $20,236, are gone and one hopes that a rally will follow this year. But of course, nobody can foretell the future, so now Malta is one of the few pioneer countries which prides itself to be able to regulate the VFA sector. This year, while Bitcoin is making a shaky climb closer to the $4,000 mark, the entire industry of cryptocurrency is still reeling from hitting relative new lows. It is par for the course.  

Needless to say, six years ago the ECB was rather sceptical of virtual currency schemes, seeing the glass half-empty and not half-full. Now with the dawn of the AML fifth directive on our doorstep, one expects that banking regulators would take a cautious approach to virtual currency. So far, it has been a bumpy ride and the community has learned some lessons from the painful birth pangs of the sector.

Even so, there has been a number of early devotees who with luck and foresight became rich on holding Bitcoin. Others were less fortunate. Certainly, market observers hope that last year was only a year of correction and from now onwards, we shall see a rally in the sector.

Quoting a recently published A.T. Kearney report: “By the end of 2019, Bitcoin will reclaim nearly two-thirds of the crypto-market capitalisation as altcoins lose their lustre because of growing risk aversion among cryptocurrency investors.”

Nevertheless, the novelty that was given birth ten years ago in Japan will not fade away so easily. Malta started last year to toy with the novelty of the Blockchain technology – one that gave birth and support to virtual currencies. It passed a number of laws to regulate the Blockchain and its derivative services. It is all a matter of trust.

Having just about exploited the celebrity of Blockchain, the Prime Minister Joseph Muscat was euphoric in his New Year message, saying inter alia, that we may switch our sights to try scaling the mountain of AI – a sector where in the USA and China, we find tech giants which pour billions of dollars annually in research and development.  Mindful of the legal and technical minefield that may lay ahead the government formed a committee of experts to help design and draft parameters leading to a safe framework and good governance in the field of Artificial Intelligence.

It is an open secret that government is keen to be seen helping innovation and would like to see Malta becoming a jurisdiction that attracts talent from all over the world. Artificial intelligence and robotics are two “overnight successes” that have been decades in the making, and their intersection will soon change a multitude of industries.

The evolution of smarter AI and more-versatile robotics has helped both technologies to push past repetitive tasks to take on adaptive and more intelligent applications. In the coming years, the result will be nothing short of revolutionary paradigm shifts.

The impending age of smarter robotics will certainly have a profound impact on traditional manufacturing; for instance, the heath sector in Malta will soon make use of robotics to allocate medicines to patients and assist in useful operations taking place in the operating theatre.

This initiative will spearhead other uses in the manufacturing sectors and create interesting scenarios in areas of productivity, safety, service, transportation, land registration and police records. More will be revealed when driverless cars will become fully functional and slowly enter the mainstream.

Autonomously driven cars and drones are both forms of advanced robotics, and they will pave the way for more specialised services that will speed productivity. They will impact every area of our lives. As was the case of the internet revolution, some of the novelties will happen in a gradual, evolutionary way; some will happen in a sudden, revolutionary manner.

Back to virtual currencies and the advent of Blockchain, we can predict that if and when they become mainstream, Fintech will be attracted to Malta. One hopes that no effort is spared by the authorities to attract banks that are friendly to virtual currencies, since at present banks in Malta do not support Bitcoin although efforts are in the pipeline to attract newcomers.

It is a classic situation of a pub with no beer where governments tend to place the cart in front of the horse. As can be expected, the mismatch of no banks will be solved thanks to practitioners – they go the extra mile to correct the position. It is good to note, that PKF Malta has committed itself to making an investment towards embracing Blockchain in Malta. The investment will be made in developing BITPOD, which will function as a quasi-lab It comprises a live project dedicated to fuelling research and development with a special accent on the emerging fusion between technology and the financial world.

Commenting about DLT and PKF’s commitment to invest in this technology, the writer is of the opinion that, “Distributed ledger technology and virtual financial assets will play an important role in the V.R. experiment. The BITPOD experiment will include a technical publication by the end of the year to be made available to the public leading to a compilation of the findings, observations, conclusions and results.

Additional to the BITPOD, complementary BITBLOCK sessions will present a series of ad hoc working sessions in a casual format, once again aimed at provoking thought, ideas and novel discussion with local as well as international patronage.”  

In conclusion, PKF commends the good work and investment being done by Government and encourages the private sector to follow suit on this remarkable journey that promises to make its mark an indelible one.