The Malaysian central bank and the securities regulator have indicated that they will collaborate in implementing a regulatory framework for cryptocurrencies and ICO tokens.
In a joint statement, Securities Commission Malaysia and Bank Negara Malaysia disclosed that this arrangement will be restricted to ensuring compliance only with the regulations and laws that fall under the oversight authority of the two regulators.
"In order to implement the regulatory framework on digital assets, the SC and BNM will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators," said the media release.
ICOs Deemed Securities
The Securities Commission will regulate Initial Coin Offerings as well as cryptocurrency trading in the country and the relevant legislation is currently being worked on with a view of bringing digital assets under the existing securities laws in order to protect investors and promote fair and orderly trading.
The expected regulations will require cryptocurrency exchanges and issuers of ICOs involved or dealing with digital assets that possess a payment function to ensure compliance with the central bank’s laws and regulations. Issuers of ICOs and cryptocurrency exchanges will also have to ensure compliance with the ‘Guidelines on Prevention of Money Laundering and Terrorism Financing’ set by the Securities Commission.
While the Southeast Asian country generally has a pro-cryptocurrency stance, the central bank made clear in the joint statement that ‘digital assets are not legal tender in Malaysia’.
Regulations Coming in Q1
This comes a little over a week since Malaysia’s finance minister, Lim Guan Eng, stated that cryptocurrency regulations, aimed at safeguarding investor interests, will be enforced in the first quarter of next year.
Malaysia’s Finance Minister: Crypto Regulation to be Enforced in Q1 2019 https://t.co/kVg7KqPb5A
— CCN Markets (@CCNMarkets) November 29, 2018
Though not explicitly stated, Lim hinted then that the country’s central bank and the securities regulator would partner in formulating a regulatory framework for ICO tokens and cryptocurrencies under the leadership of the finance ministry:
"Both Bank Negara and the SC, in terms of formulating this framework will be under the auspices of the Finance Ministry. The Finance Ministry will lead the committee comprising of Bank Negara, the SC, and the MOF itself.”
Late last month, the finance minister had advised that only the central bank has the authority to determine the fate of anyone intending to issue cryptocurrencies.
“This is where I wish to advise all parties, no matter who they are, intending to issue bitcoins or cryptocurrency, that they must refer to Bank Negara which is the authority that will have the final say on this new form of currency,” CCN reported Lim as having said.
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