Insights

Max Ganado was interviewed live by Patrick Young during one of his weekly episodes that revolved around blockchain and its potential of revolutionising financial law.

During the interview, Max describes Malta’s mixed legal system and the prevailing differences between the civil and the common law system in the context of financial innovation and growth. Max also delves into the use of innovative technologies, like blockchain, for different asset registers and the potential of such technology in offering a secure and reliable digitisation platform, tackling long-standing problems like the possibility of double-spend which is a real risk in the civil law systems using post deed registration systems which allow for several days for registration by notaries to be carried out. He explains the advantages of unifying registers for more efficient legal systems and the importance for smaller financial centres to stay ahead of innovative trends promoting efficiencies (of course with integrity standards to be assumed) that are lacking in bigger systems

He further explains how derivatives can be considered to be one of the first drivers of legal innovation in Malta that kick-started the massive growth within Malta’s shipping industry..

Max further explains how innovative technologies can be used in consolidating information in a secure manner through the concept of RegTech, that can be considered as a major technological enabler within the compliance space. Max explains the concept of trusts in an offshore context versus the concept of trusts as a legal solution allowing for massive innovation and efficiency – reducing many players into one counterparty and multiple assets into one pool. He also debates how blockchain is eliminating the need for intermediaries, which inevitably poses the biggest threat of disintermediation to banks and explains how Malta was one of the first countries to set up a technology regulator that certifies innovative technology before this is deployed. It is thus quality assurance approach towards blockchain platforms which was innovative at the time, although that was confused with other perceptions around bitcoin.

He further discusses the idea of how the law around blockchain and RegTech can be used to stop one from acting, thus pre-empting and avoiding potential breaches of law. Thus, the mentality of law enforcement systems through the device of ‘human inspectors’ will change as more technological advancements continue happening. It is the only way we are going to cope with the massive disproportion between our capacity and the volume of the data around us.

Click here to listen to the full interview with Max Ganado.