Malaysia: Government Still Undecided About Cryptocurrency

The Federal Territory Minister in Malaysia Khalid Abdul Samad has said that the current status of cryptocurrency in the country is undecided. He made the comment during a charity event organized by Pertubuhan Kebajikan Insaniah Srikandi Malaysia.

In the comment, he said: “At the moment, the answer is neither legal nor illegal as the situation is unclear.” This was in response to a question about the legal status of cryptocurrency.

Samad was involved in the development and launch of the controversial Harapan Coin – a project dubbed the ‘world’s first crypto-politic ICO’ – said to be a platform that will revolutionize Malaysian politics. He disclosed that he was not appointed as finance minister, but the federal territory minister, which made crypto regulations hardly a subject particular to his jurisdiction. “As the matter is not under my jurisdiction, I cannot push too much,” he said.

However, Samad reportedly proposed the adoption of Harapan Coin to Malaysia’s Central Bank, the Bank Negara Malaysia (BNM) and Prime Minister Tun Dr. Mahathir Mohamad. However, questions have been raised about the functional and clarity of purpose of the Harapan Coin by a select few, including former Prime Minister Datuk Seri Najib Razak.

In November last year, the finance minister of Malaysia Lim Guan Eng confirmed that a digital asset regulatory framework is scheduled to be released in the first quarter of 2019. This regulatory framework, which has been in motion for over a year now was intended to help the cryptocurrency industry without compromising on their financial system.

The report in November further suggested that the regulatory framework will most certainly include standards for both cryptocurrency exchanges and initial coin offering (ICO).

For now, any project that intends to issue cryptocurrency in Malaysia would have to go through the country’s central bank, Bank Negara Malaysia (BNM). More so, cryptocurrency exchanges have been reporting their data to the bank in order to forge a system to watch for money laundering activities. However, the Bank has stated explicitly that this in no way provides a certification of services by the exchange.

So far, the development of the industry has leaned more to the blockchain scope and while the regulatory stance of the financial watchdog is still underway, blockchain use cases are still spreading, this includes the recently developed remittance system and the proposed blockchain-based degree verification system.

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