Hon. Silvio Schembri, Malta's Minister for the Economy and Industry, reflects on Malta's response to the pandemic and current stance on the digital economy within iGaming - SiGMA TV's Executive Series
In the latest of our exclusive 'Executive' series, Hon. Silvio Schembri - Malta's Minister for the Economy & Industry - joins SiGMA TV for a rare and candid interview to share his personal insights into the events of the most unstable year in recent history, the changes in his own political career, and the outlook for the island's economy moving forward.
In March 2020, the previously healthy economic growth of Malta came to a standstill and the jobs of 50,000 residents were put at risk by the global pandemic. Today, however, Malta has one of the lowest unemployment rates in Europe.
Malta's response to the COVID-19 pandemic
When asked what are his personal feelings about the pressure of being responsible for the livelihoods of the Maltese people, under the difficult circumstances of the pandemic, Schembri (pictured below at the SiGMA iGAMING Conference 2019 Malta) responded:
The fact that this crisis was a health crisis transformed into an economic and financial crisis, it had all the most difficult elements and tried keep them in balance.
From our side, we tried to keep families to live as close to normality as possible. Being able to still go out, being able to go to work, to sent our children to school, to even go to a restaurant. This was not an easy task.
The digital economy in Malta
While the COVID-19 pandemic proved to be one of the most challenging and volatile years in recent history, it also acted as a catalyst for the adoption of technology. In effect, this past year has seen digital economies, such as iGaming, soar above traditional structures. In agreement, Schembri, who also served as the parliamentary secretary for financial services and digital economy, shared:
This particular part of the economy is very close to my heart. For the past three years, we have done so much work in his area. We've put Malta on the map when it comes to the digital economy. We've introduced new legislation when it comes to blockchain. [...], a new policy when it comes to esports and video game development industry. A new policy on how we will regulate the gaming industry per se, and how we've overhauled the whole regulation of the gaming act of Malta.
So, now we're seeing the infusion between the traditional economy into a digital economy. As I see it, the future is the digital economy.
When asked how he sees the digital economy (like iGaming) expanding it's presence on the island, Schembri replied: [12:30]
Of course [gaming is] on the top of our agenda, it represents quite a substantial amount for GDP but I'm not just looking at the gaming industry, just at the online gaming industry, there's much more to that.
I think that as time goes by, the gaming industry will then continue to infuse into other areas being blockchain, being the video game development industry, being esports, and I see a lot of potential there. In fact, last year I launched the video game development startegy for Malta. The target is clear, to have that particular area represent 1% of our GDP, as things stand today it represents about 0.1%.
Malta as the “iGaming capital of Europe”
Malta has been hailed as the “iGaming capital of Europe”. Currently, there are questions surrounding whether the country is aiming to become the Blockchain capital of Europe. As a high-risk endeavor, Schembri explains how the Government is navigating this process:
Three and a half years ago or four years ago when I started to speak about blockchain and crypto here in Malta, it was something new for our country. Being part of the European Union was even a harder task to discuss because obviously you have different institutions. And by its very own nature, blockchain is decentralised.
He continues to expresses the difficulty in persuading the Government to adopt such a foreign system and their initial backlash. However, the decision to lead in crypto opened the door to discussions of licensing, for which he states:
I must say, I was a bit disappointed in terms that the Malta Financial Services Authority (MFSA) I think could have done more in terms of expediting certain decisions. But I understand that coming from a financial regulator, the fact that we had other challenges being the Moneyval report, being other financial challenges that as a country we had to face and to make particularly hard decisions and changes, this might be obviously of a greater decision. Crypto is considered as a high risk area.
Silvio Schembri also appears on BLOCK Issue 3.
Watch the full episode below:
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