The central bank of Malaysia recently hinted when addressing reporters that a blanket ban on all cryptocurrency activity might be in the works for Malaysia.
The governor of Malaysia’s central bank, Bank Negara Malaysia (BNM) recently confirmed that the country would announce its decision on whether they will ban cryptocurrency at the end of 2017. Currently, there is no cryptocurrency regulation in Malaysia.
According to governor Muhammed bin Ibrahim, the decision will be made and made public at the end of 2017. However, his subsequent statements hinted at there is a strong chance of cryptocurrency activity being banned. Governor Ibrahim stated that before the close of the year, the Malaysian financial authorities intend to address several concerns. Some guidelines that will be issued will include concerns regarding registering investors, collecting information, and ensuring that all cryptocurrencies are used towards legal practices.
China’s recent ban on initial coin offerings (ICOs) and domestic cryptocurrency exchange encouraged a mass capital outflow, which in turn caused the Malaysian markets to reach record highs.
Up until now, all cryptocurrencies have been unregulated. During 2014, BNM released a statement wherein they emphasized that the Bitcoin, and other cryptocurrencies, were not considered legal tender within Malaysia. The bank also confirmed in this statement that they did not regulate Bitcoin or other currencies. During last month, BNM issued another statement which warned potential investors about fraudulent ICOs.
Several financial experts have claimed that by legalizing Bitcoin, Malaysia could have an alternative to changing currencies. Recently the Malaysian ringgit endured strict capital regulation’s following President Trump’s election and the dollar surge that followed. These events caused a mass devaluation of the Malaysian currencies.
Several players in currency exchange were affected severely, especially multinational banks and investors, as they could not convert the local currency to US Dollars. All expatriate remittances to the country also suffered a blow. Considering bitcoin’s decentralized system, many have argued that Bitcoin could allow capital to flow in and out of the country with more ease.
While a ban is possible, other financial authority officials have also hinted that Malaysia would accept cryptocurrencies if it were regulated. The assistant governor or BNM dropped several other hints regarding the matter. According to the assistant governor, BNM’s main objective in the coming months would be to balance both the safeguarding of their own fiat currency, while making the necessary room for innovation and progress. The governor also hinted that the Malaysian government might soon revise its strict anti-money laundering policies.