The securities commission and central bank of Malaysia have released a joint press release offering a brief outline of their intentions to regulate digital assets and initial coin offerings (ICOs).

The announcement, co-authored by the Securities Commission Malaysia (SC) and the central bank of Malaysia, Bank Negara Malaysia (BNM), aimed to provide some clarification on the regulations being put in place. The news comes shortly after the Finance Minister of Malaysia, Lim Guan Eng, had told local press that the digital asset regulatory framework would be delivered in the first quarter of 2019.

In brief

Currently, the regulations to “bring digital assets within the remit of the securities laws to promote fair and orderly trading” are to be applied to digital assets issued through ICOs as well as the trading of cryptocurrencies on domestic exchanges, to “ensure investor protection”. It extends this by adding that ICO issuers and exchanges will be subject to the commission’s ‘Guidelines on Prevention of Money Laundering and Terrorism Financing’.

Accordingly, both ICO operators and crypto exchanges that handle digital assets with “a payment function” will be required to adhere to BNM laws and regulations pertaining to payments and currency matters. Previously, Lim had spoken open-mindedly about cryptocurrencies, claiming that he did not want to hinder cryptocurrencies, though reminded that they are subject to existing laws.

The press release concludes with a disclaimer from the BNM stating that “digital assets are not legal tender in Malaysia”, encouraging consumers to perform due diligence prior to engaging with cryptocurrencies. Finally, it loosely describes how these frameworks are to be implemented, writing, “…the SC and BNM will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators”.

Regional competition

Malaysia has been emerging as a key player in the South East Asia blockchain race that is accelerating in pace. In September, the nation displayed its bullish moves and began working to marry its top three industries with blockchain technology, namely Islamic banking, palm oil, and its energy sector.

The region has undoubtedly caught the blockchain buzz. In the Philippines, ICOs and cryptocurrency exchanges are soon to have regulations in place, which comes shortly after two new crypto exchanges were established and additional bullish blockchain news.

In addition, Singapore has been making waves akin to that of nations who, like South Korea, are feverishly adopting blockchain technologies, bolstering the domestic ecosystem through institutional investors and making significant progress in their bid to regulate the sector.

As competition heats up in the region, many other major entities such as the European Union and the G20 are making strides in a similar direction. Blockchain is breaking out into global discourse like never before; the “fad” is here to stay.

 

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