Malaysia will not enforce a blanket ban on the trading of cryptocurrencies like bitcoin, the country’s second finance minister revealed.
In an interview with The Malaysian Reserve, the country’s second Finance Minister Johari Abdul Ghani has confirmed that the country’s central bank will not impose a ban on cryptocurrencies, emphasizing that such a draconian move would ‘curb innovation and creativity in the financial sector.’
The official, who said the government is focusing on striking “a balance between public interest and integrity of the financial system”, added:
“It is not the intention of the authorities to ban or put a stop on any innovation that is perceived to be beneficial to the public.”
The remarks will come as a relief to adopters of cryptocurrencies like bitcoin in Malaysia and represents a shift in stance after Bank Negara Malaysia (BNM) governor Muhammad bin Ibrahim refused to rule out a complete ban on cryptocurrencies back in October 2017. Malaysia’s central bank issued draft regulations for public consultation in mid-December wherein cryptocurrency exchanges will be designated as ‘reporting institutions’.
While open to cryptocurrencies, Johari said the central bank is taking a cautious approach that will focus on the “need to have proper regulation and supervision to ensure any risk associated with such schemes are effectively contained.”
Financial innovation brought on by financial technologies like cryptocurrencies will enhance the country’s economic productivity and make financial intermediation “more seamless” Johari said. Pointedly, the official went on to include digital currencies and e-wallets as a ‘part and parcel’ of Malaysia’s digitalisation roadmap.
Crucially, the finance minister stressed the importance of having a ‘thorough understanding’ of digital currencies before introducing clear regulatory policies.
“This is particularly relevant to recent innovation like bitcoin, which remains unregulated globally and not battle-tested against shocks, unlike more conventional mediums of exchange.”
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Last modified: May 20, 2020 9:14 PM UTC