Malaysia’s Bank Negara – the country’s central bank, has just published new draft regulations for cryptocurrency exchanges that take place within this Asian nation. Announcing the developments through its official website, Bank Negara asked the public to weigh in on the new regulations as a way of countering various crimes. BNM governor Muhammad Ibrahim expects the rules to be able to stop cases of money laundering and financing terror-related concerns using digital currencies in Malaysia.
The announcement was on Thursday 14th, 2017, following months of work that involved ironing out the regulatory framework. Working on it started way back in September and brought together dignitaries at a Counter-Terrorism Financing Summit, although no one expected them to have been finalized by now. Back then, Reuters had reported the giant bank’s motives that were in line with the country’s anti-money laundering and anti-terrorism financing Act.
Proposed Regulations Are Meant For Market Integrity And Investor Projection
It isn’t a secret that cryptocurrencies can be used in illegal deals, including funding terrorists. Bitcoins are decentralized, unregulated and highly valuable and that’s why criminals prefer to use them instead of fiat currencies. And with Malaysia having many terror-affiliated criminals, maybe this will be a smart move.
The proposed regulations would require corporates to verify identities of the clients, monitor all cryptocurrency-based transactions, and report any questionable dealings to the Malaysian authorities. Furthermore, the rules will need all companies to report usage statistics to the country’s central bank regularly.
They Will First Have To Be Approved
The draft regulations state that everyone would be advised to follow due diligence and assess the risks involved when dealing with anything that touches on cryptocurrencies.
“Members of the public are therefore advised to undertake the necessary due diligence and assessment of the risks involved in dealing in digital currencies or with entities providing services associated with digital currencies.”
It will remain to be seen of the draft rules will be approved. However, if accepted, the rules will apply to all persons and companies that engage in any cryptocurrency-related business, whether on their own behalf or someone else’s.
How The Public Can Weigh In On The Draft Rules
Meanwhile, Bank Negara Malaysia is calling upon the people to write their suggestions of these draft guidelines before the deadline – January 14th, lapses. According to the governor Muhammad Ibrahim, the laws will not entirely apply to cryptocurrency exchanges – what he refers to as “Reporting Establishments.” The country’s chief securities regulator wants a clear framework that will govern all cryptocurrencies dealings.
Malaysia Is Yet To Recognize Digital Currencies As Legal Tender
Interestingly, these regulations seem to show that companies are free to accept and transact with the digital coins. Malaysia doesn’t officially recognize crypto-currencies as legal tender, a move that is weird given what the regulations are trying to tame. However, either way, you see this, every party is a winner!
The rules are yet to be approved, but do you think this is the way to go for other countries all over the world? Will the so-called “Reporting Establishments” cooperate with the authorities and report any suspicious dealers? Let's know what you think in the comments below.