The head of Malaysia’s central bank has revealed further details about the institution’s upcoming regulatory framework governing cryptocurrency usage in the country.
Speaking in Kuala Lumpur at a counter-terrorism financing summit on Wednesday, Bank Negara Malaysia (BNM) governor Muhammad bin Ibrahim expanded on the upcoming “clear guidelines” for participants in the cryptocurrency sector. With a focus on combating money-laundering and terrorism financing, Ibrahim revealed that beginning next year, those converting cryptocurrencies into fiat currency will be designated as “reporting institutions” compliant with certain mandatory rules.
Under the upcoming regulatory mandate, these ‘reporting institutions’ will be required to implement measures to prevent their platforms turning into for money laundering and terrorism financing, according to the central banker.
In a quote reported by Reuters, Ibrahim said:
This is to prevent the abuse of the system for criminal and unlawful activities and unlawful activities and ensuring the stability and integrity of the financial system.
While a definitive timeline for the upcoming regulations remain unclear, Ibrahim confirmed the authority’s plan to introduce a regulatory framework before the turn of the year. “We hope that by year end, BNM will be able to come out with some guidelines on cryptocurrency, particularly those related to anti-money laundering and terrorist financing,” Ibrahim told reporters at a financial symposium in September. While unlikely, the central bank governor did not rule out an outright ban on cryptocurrencies.
Ibrahim’s remarks this week comes after similar noteworthy statements from Malaysia’s securities regulator and watchdog pressing ahead with regulations for local cryptocurrency trading. Earlier this month, Securities Commission (SC) Malaysia chairman Ranjit Ajit Singh underlined the authority’s intent to “acknowledge and embrace” the growing trend of increased interest and demand for cryptocurrencies. The SC, he said, will work together with Malaysia’s central bank to “carefully apply the right framework.”
Featured image from Shutterstock.