Most of the central banks around the world are finding out the ways to regulate virtual currencies. The same goes for the Bank Negara Malaysia (BNM), as Malaysia introduces cryptocurrency regulation in early 2018.
24 November, AtoZForex – In September this year, the governor of Bank Negara Malaysia Muhammad bin Ibrahim said that the Malaysian central bank will draft cryptocurrency rules for those trading and exchanging cryptocurrencies. Back then, the Governor stated that hopefully by year-end some cryptocurrency guidelines will be released.
Following this forecast, this week, it has been reported that the central bank in Malaysian has planned to enforce regulation of digital currencies in early 2018.
Malaysia Cryptocurrency regulations expectations
According to BNM Governor Tan Sri Muhammad Ibrahim, the introduction of regulations for virtual currencies aimed at preventing abuse of the system for criminal and illegal activities. Furthermore, it also protects the stability and integrity of the financial system. In a statement, he expressed;
“The advent of digital currencies may 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.”
As per the new regulation, the central bank will designate individuals exchanging cryptocurrencies into fiat money as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. However, the implementation of regulations does not mean that virtual currencies are suddenly considering legal tender in the country. Anyone using the cryptocurrency will need to adhere to the strict guidelines affecting banks and other financial institutions.
Malaysia introduces cryptocurrency regulation and new banking rules
According to the report, the Financial Intelligent Unit (FIU) received 346 terrorism financing-related STRs between January and June this year, compared with 93 STRs in 2015. In a related fact, the governor said that the central bank is also preparing the details of a new requirement for the Banking and Money Services Business sector to report in high-risk areas.
“The high-risk areas will be determined based on the law enforcement agency’s intelligence on areas that they view may pose higher risks for funding of terrorism activities,” he said.
In overall, it is good to see that Malaysia is keeping an open mind on the new wave of innovative financial technologies. This will benefit the cryptocurrency market in Malaysia, opening doors for virtual currencies like Bitcoin, Ethereum and Litecoin. Yet, whether or not this regulatory framework will please local exchanges in the country, remains to be seen.
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