Bank Negara Malaysia (BNM) will issue a proposal on how to regulate the use of cryptocurrencies early in 2018. The Malaysian central bank has been discussing how best to regulated digital currencies for quite some time. These new proposals are welcomed by industry players.
BNM Governor, Tan Sri Muhammad Ibrahim, states that regulations for virtual currencies are drafted to prevent abusing the system for illegal or criminal activities. These regulations will also maintain the integrity and stability of Malaysia’s financial system.
“The advent of digital currencies as some have forecast will mark the beginning of a new era in the financial sector. As authorities, we cannot be oblivious to these developments….The banking sector needs to adopt the latest and most advanced technologies to improve its risk management framework,” explains Tan Sir Muhammad Ibrahim.
There are impacts of the new regulations on the cryptocurrency market. Individuals who convert virtual currencies into fiat currencies are now considered as reporting institutions and subject to Malaysia’s Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities Act of 2001. Cryptocurrency transactions are held to the same laws as banks.
Implementation of these regulations should be considered as a guide for digital currencies. It does not mean that virtual tokens are accepted as legal tender in Malaysia. These regulations are an indication that the central bank is watching cryptocurrencies and keeping staying flexible on the trend of innovative technologies in the financial sector.
The introduction of digital currency regulations in Malaysia proves that there is a bright future waiting for virtual currencies like Ethereum, Bitcoin, and Litecoin. It is still a mystery, however, if these regulations will lead to the adoption of cryptocurrencies in the country.
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