Stephen McCarthy
CEO of Malta Digital Innovation Authority
Innovation / Malta
“We do due diligence on technology itself”
After pioneering in the regulation of distributed ledger technologies technologies, Malta is set to become the first country in the world to certify Artificial Intelligence. Stephen McCarthy, CEO of Malta Digital Innovation Authority (MDIA) speaks about Malta’s unique digital transformation path.
What are the reasons behind the decision to establish Malta Digital Innovations Authority?
The Maltese Government realized the importance of blocking technology and the advantages it could bring to various sectors of the economy. We opted not only to embrace this type of technology, but also to protect and regulate it. In this sense, Malta enacted a pioneering regulatory framework centering on the use of Innovative Technology Arrangements capturing Distributed Ledger Technology (“DLT”) platforms and blockchain technology. The idea behind MDIA is enforcing standards that protect and support all users and also encourages all types of innovations, by allowing for maximum flexibility when it comes to the certification of Innovative Technology Arrangements. Malta’s efforts in positioning itself as an enabler of safe and dependable technology have shown success, as an increasing number of operators are now coming to Malta to get their licenses.
What distinguishes Malta from other technological hubs?
Malta is truly a global leader when it comes to digital innovation. We are the first country in the world to set a legal infrastructure for DLT. What distinguishes us from other countries and other hubs is the fact that we have established a holistic ecosystem. Furthermore, Malta is indeed the only country in which we do not only do due diligence on the individuals, but we also do due diligence on the technology itself. MDIA’s primary objective in the past year was to set a framework that ensures safety, quality and dependability of DLT-based systems, through a technology certification process. We are focusing on quality, not on quantity.
MDIA has started accrediting its first independent system auditors, what does their role encompass?
Independent MDIA-approved systems auditors have the primary goal to ensure quality and dependability of DLT software, making sure that its performance is in line with “what it says on the box”. Under the Virtual Financial Assets Act and for Innovative Technology Arrangements (ITA), System Audits are mandatory for Issuers and Service Providers applying for a license. System auditors undergo a rigorous process prior to obtaining a license, and they need to have deep knowledge and understanding of the technology being audited as well as the system audit principles applied across IT assurance frameworks.
Malta is the only country in the world which has set up an authority specifically for technology. Also, what distinguishes us from other jurisdictions is the fact that we engage independent system auditors, who are not employed by us, thus ensuring that the software adheres to its, giving peace of mind to both users and investors.
Could you elaborate on Malta’s Artificial Intelligence strategy and its benefits?
The Strategy and Vision for AI in Malta 2030, launched at the Delta Summit 2019, aims to make Malta a leader in the AI field. The MDIA has been tasked with the responsibility of monitoring and governance of the strategy’s implementation. Malta is set to become the first country in the world to certify Artificial Intelligence software, which is key in ensuring that artificial intelligence is trustworthy and dependable. The country’s national AI certification programme aims for AI solutions to be developed in an ethically aligned, transparent and socially responsible manner.
How are you tackling the lack of tech-skilled labor?
Malta experienced an economic boom in the past five years, and we are now facing labor shortages in various sectors. The challenge is even greater when it comes to technology. To tackle this issue, we are enticing operators who seek to establish operations in Malta to also bring international experts and organize courses to train the local staff. Indeed, Malta already has an excellent core group of technology experts who have spearheaded our pioneering legislation, but we are also aware that there is a wider knowledge in the international arena which we want to harness.
How do you evaluate the potential for cooperation between Malta and the UAE?
The UAE has always been an important partner to Malta, both in traditional sectors such as real estate and finance, as well as in technology and digital innovation. With Malta’s pioneering regulation, we are now receiving a lot of requests from operators from the UAE. I believe that Malta and the UAE can benefit immensely from sharing of experiences.
