The Role of the Malta Digital Innovation Authority

Updated: September 08, 2020 | 3 minute read

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The Role of the Malta Digital Innovation Authority


The Malta Digital Innovation Authority (the “MDIA”) is an authority established by virtue of The Malta Digital Innovation Authority Act (the “Act”). The MDIA could be said to embody Malta’s efforts to become a “blockchain island” in that. It is the primary driving force which is entrusted with developing innovative technological development within the context of Malta’s digital economy.

Specifically, the MDIA’s remit is focused on Innovative Technology Arrangements (“ITAs”). ITAs are

  1. Software and architectures which are used in designing and delivering DLT which ordinarily, but not necessarily:

    1. Uses a distributed, decentralised, shared and, or replicated ledger;

    2. May be public, private or hybrids thereof;

    3. Is permissioned, permissionless or hybrids thereof;

    4. Is immutable;

    5. Is protected with cryptography; and

    6. Is auditable;

  2. Smart contracts and related applications, including decentralised autonomous organisations (DAOs) as well as other similar arrangements;

  3. Any other innovative technology arrangement which may be designated by the Minister, on the recommendation of the MDIA, by notice from time to time.

Apart from providing detail on the constitution, establishment and organisation of the MDIA, the Act provides fundamental detail with regards to:

  1. Guiding principles which govern the MDIA;

  2. Functions of the MDIA;

  3. Powers of the MDIA.

Guiding Principles

Substantially, the guiding principles may be condensed into three fundamental ones which provide that the MDIA shall:

  1. Promote governmental efforts pertaining to the ITAs and defend Malta’s reputation in this respect;

  2. Promote the use and development of ITAs through education, initiatives and proper ethical adoption;

  3. Protect users of ITAs, including consumers and the public in general and to ensure standards to meet their legitimate expectations and protect against misuse.

The guiding principles provide a solid ground upon which the MDIA is constituted and upon which the MDIA shall perform its functions.

Functions of the MDIA 

The Act provides for a variety of functions which the MDIA must perform. All of the functions are to be performed against the guiding principles. In particular, the MDIA shall, amongst others:

  1. Regulate and supervise ITAs and services pertaining to such;

  2. Promote and protect users of ITAs through the promotion of fair competition;

  3. Provide for a mechanism of registration and certification of ITAs;

  4. Regulate innovative technology products;

  5. Establish minimum standards for the quality, compliance and security of ITAs.

In practice, therefore, the MDIA is the legal authority responsible for the approval of Systems Auditor as well as the certification of ITAs. Such duties are particularly relevant within the context of service providers wishing to provide virtual financial asset services in or from Malta as well as companies seeking to conduct an initial virtual financial asset offering from Malta.

Powers of the MDIA 

To wrap up the MDIA’s functions, the Act also provides for a set of powers which the MDIA may utilise to ensure that the guiding principles are adhered to through the proper application of the law. Notably, the MDIA has the power to revoke, cancel or suspend any authorisation/certification which it grants based on, for example, breach of law, public interest or misrepresentations.

The Importance of the MDIA

The MDIA sets as a connecting factor between legal certainty and technological development. It is a key component of Malta’s vision for the development of the digital economy.

Nexia BT

NBT Technology Limited is a licenced Systems Auditor duly authorised by the MDIA. Recognition number: 0006

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