Malaysia clears ambiguity with digital trading
The status of crypto-currency trading in Malaysia has, up to now, remained somewhat unclear, as it has not formally been made illegal but has also remained unregulated.
Minister of Finance Lim Guan Eng set out to change this ambiguity by announcing the new regulations on January 14, saying the “Capital Markets and Services Digital Currency and Digital Token Order, 2019” would establish criteria for coin issuers and exchange operators and bring about disclosure of standards and best practices in pricing, trading and client asset protection.
Any future digital asset offerings will require Securities Commission authorization, will have to meet anti-money laundering and counter-terrorism financing rules and will have to demonstrate cyber-security and business continuity measures.
The regulations are expected to be launched before the end of the first quarter in 2019 and traders circumventing the new laws can expect a fine of up to 10 million Malaysia ringgit (US$2.4 million) and 10 years in prison, Lim told local media.
An earlier December announcement, by the Securities Commission and the country’s central bank, the Bank Negara Malaysia, said the new laws would “promote fair and orderly trading and ensure investor protection,” and the regulations come as several Malaysia blockchain initiatives are rolled out.
HSBC Malaysia is reportedly engaging Malaysian regulators, including the Bank Negara Malaysia (BNM), to work to launch a blockchain-based trade finance platform, while a Singapore and Malaysia-based consortium is seeking to launch the world’s first blockchain bank.
The collaboration between CGCX.io, the Archipelago Group and IBH Capital was reportedly developing a blockchain-based investment bank located in Labuan, Malaysia. The bank will have dedicated divisions for handling crypto-currency, blockchain and digital banking operations.
As reported on Tuesday in Asia Times, a blockchain-based cross-border remittance program between Pakistan and Malaysia – that has been set up by Alibaba’s Alipay, Karachi-based Telenor Microfinance Bank and Malaysia’s Telenor group’s Easypaisa payment solution – intends to capture a slice of Pakistan’s international remittance market, that Islamabad estimates is worth about US$20 billion per year.
Last July, international technology developer NEM Foundation opened its new Southeast Asian headquarters in Kuala Lumpur, and the 11,000-square-foot facility, that was said to be the biggest blockchain-focussed facility in Asia, now serves as a learning center, incubator and accelerator for blockchain related startups.