Malaysia Proposes $6k Cash Transaction Limit In 2020; Will Cryptocurrency Adoption Soar?
- The limit by the Malaysian government will be 25,000 ringgits, which is approximately $6,048.
- Cryptocurrency is not controlled by any specific entity and does not impose limits on transactions.
A deputy governor at the central bank of Malaysia – Abdul Rasheed – recently stated that there would be a $6,000 limit on cash transactions next year. With these new restrictions, the government is hoping to prevent cash from being used in illicit transactions, though the new rule won’t likely impact any transactions involved with humanitarian aid. Rasheed believes that these measures will involve absolutely any transaction for cash, which includes payments for goods and services.
The limit specifically restricts cash transactions to 25,000 Malaysian ringgits, which is approximately $6,048. It will also apply to any donations and transfers, involving people, businesses, and other entities. Rasheed states that the typical spending of a Malaysian household is about 8,000 ringgits a month, which is significantly less than the limit. However, the maximum fine will not be more than three times the value of the offense.
Right now, the Bank Negara Malaysia (BNM) is waiting for the public to provide feedback on the measures, though Rasheed states that there’s a major need to limit cash transactions, dude to their anonymous nature. The Australian government presented a similar plan which forbids any cash transactions over $6,900, though their transactions include digital currencies.
Cryptocurrency operates on a trustless ledger, meaning that everything is already on the blockchain that cannot be changed. Consumers are able to access their funds at any given moment and can transfer any number of crypto assets across exchanges. While the market is entirely unregulated, the fact that consumers have this type of freedom in the crypto industry is becoming more and more rare.
Since the cryptocurrency industry is decentralized, there is no single entity that controls the network, which gives consumers freedom. Consumers just have to know the wallet address that they want to send their money to, agreeing to the transaction fees before posting to the distributed technology ledger. The transaction will always be on the record, acting as its own settlement and receipt.
Right now, there are hundreds of cryptocurrency assets for consumers to choose from. These assets have been adopted by merchants, sports teams, and even everyday companies as incentives to consumers. In a world that is growing more digital by the minute, having a form of payment that can be used in almost any country isn’t just for high-tech investors. Workers send their funds overseas to their families, and companies like Ripple allow these transactions to happen without any fees or even cash. Consumers are able to cash out whenever they want or use the products as investment tools.
The industry is risky, much like the traditional financial industry. As the demand for online currency grows, some experts believe that the tech can threaten the structure of society, opening the door to cybercriminals. The lack of regulation is seen as both an advantage and a disadvantage, which is why many countries have imposed Know Your Customer and Anti-Money Laundering laws for operation in their region. The losses in this industry have been highly publicized, but some experts forget that cryptocurrency is still new, and traditional finance has had decades to adapt and protect itself, only to still be met with issues.
As the financial industry evolves, it needs technology to keep up. Though there are still plenty of naysayers, cryptocurrency has proven that it isn’t going anywhere yet, even if the financial freedom of citizens around the world is being tested.