As the financial technology revolution slowly takes over worldwide, certain countries have been industry leaders in moving the revolution forward. Each country has developed its own method and strategy to incorporate digital financial methods. In particular, Malta, Estonia and the United Kingdom are countries that stand out in the movement. Malta has been closely linked to the leniency of cryptocurrency regulations. Estonia is the first country to offer e-Residency. The United Kingdom has made big pushes to direct fintech businesses to their country. The main factor in these contemporary movements is receptive regulations. These countries see the benefit to move financial technology forward, and are open to serving as an example to the rest of the world that new financial technology approaches can be successful and thriving.
While most countries have been working to eliminate or curtail the use of cryptocurrency, Malta is the first country to welcome it with open arms. Malta, the smallest country in the European Union has been working over the past year to develop an appropriate regulatory situation for the cryptocurrency and blockchain industry. This past July, the Maltanese government approved three separate bills that provide a regulatory framework for cryptocurrency and blockchain. While these bills are still regulation, they are considered friendly to the industry and provide a safe and flexible atmosphere for thriving ventures. On November 1, 2018, these regulations will be officially put into place.
The reason for this movement is two-fold. Prime Minister Joseph Muscat says he thinks cryptocurrency is “the inevitable future of money.” The country leaders have strong foresight to forge the way. Additionally, cryptocurrency and blockchain companies will bring jobs and economic activity into the country. In the long run, the two purposes will ultimately create a thriving and powerful force in the small country.
Estonia is special in the financial technology revolution because of their new initiative to offer e-residency to businesses and individuals. E-Residents can do business worldwide without being in Estonia, a European Union member, but conducted as if they were in Estonia. These e-Residents are given government-issued digital IDs, create and register official Estonian companies and can open Estonian bank and security accounts. Individuals do not have the be physically present in Estonia to become an e-Resident. This concept was designed with cross-border transactions in mind. With the world so interconnected, and the majority of business being international, Estonia acknowledged that there needed to be an easier and more efficient way to conduct business anywhere in the world.
E-Residency has helped to rid of currency fluctuations, and has helped e-Residents to access European Markets, where this used to be much more difficult. Additionally, the process of registering and developing a business, particularly small-sized, has become more straightforward and cost-efficient. Like Malta, government leaders acknowledge that the change is coming and it’s better to be one of the leaders, then to scramble to adjust. Viljar Lubi, Estonia’s deputy secretary for economic development said, “if we close ourselves off, the innovation happens somewhere else.” The e-Residency program has also brought in economic activity and success to Estonia.
Within the United Kingdom, programs have existed for some time to nurture technology. In 2011, then Prime Minister David Cameron launched Tech Nation, in order to support the technology hubs around the London area, particularly the neighborhood known as London Tech City. Cameron, behind his reasons, said that, “Silicon Valley is the leading place in the world for hi-tech growth and innovation. But there’s no reason why it has to be so predominant. Our ambition is to bring together the creativity and energy and incredible possibilities to help make east London one of the world’s great technology centers.” As a result of the success of Tech Nation, and the obvious trend of financial technology, the government in the UK began new programs under Tech Nation specifically for the fintech sector.
Tech Nation Fintech brings in the newest and most creative innovations in the industry and offers breeding and training to foster the most effective financial technology companies. The United Kingdom offers these services, and as a result, reap the benefits when the fintech company proves successful. Additionally, representatives of the United Kingdom are frequent visitors to fintech and payment industry expos and conferences. Representatives are able to promote these services and generally try to convince companies to make a home in the United Kingdom. Like the previous two companies, the government in the United Kingdom has seen the advantages and power of the financial technology and payments industry. They are making investments in up-and-coming companies for an eventual pay-off.
No one can know if these nation industry leaders will stay on top when the inevitable happens. Starting the financial technology revolution in the driver’s seat will surely offer all of them an advantage. But, at the moment, payment industry positive countries are definitely profiting off of the perks. They are doing something that no one else is doing at a time in history where big changes are taking place. Slowly, we are starting to see other countries jump on board with the movement, but not as quickly as they should. It is thanks to countries like Malta, Estonia and the United Kingdom, that the sector is given an atmosphere to experiment, grow and thrive.