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Malaysia’s Finance Minister: Crypto Regulation to be Enforced in Q1 2019

Last Updated October 6, 2020 8:29 AM
David Hundeyin
Last Updated October 6, 2020 8:29 AM

Malaysian Finance Minister Lim Guan Eng has revealed that a new set of comprehensive regulations guiding the activities of crypto exchanges and ICOs will come into effect in Q1 2019.

Speaking in Kuala Lumpur on Wednesday at the FinTech Conference 2018 organised by Malaysia’s Securities Commission, he revealed that the new regulations are part of efforts by the Malaysian Securities Commission (SC) to catalyse the growth of alternative fundraising and investment in new asset classes.

Comprehensive Regulatory Framework At Last?

Making the announcement while delivering the keynote address at the event, he stated that the system jointly developed by Bank Negara Malaysia (the country’s central bank) and the SC would serve as a comprehensive regulatory framework for all participants in the crypto industry. Lim also remarked that amidst an atmosphere of suspicion, consumer protection took priority as the overriding factor in making the decision.

He said :

“While some parties might still be skeptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors. […] 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.”

According to Lim, the regulatory framework forms a key part of the Malaysian government’s efforts to spur the growth of alternative financing for “high potential and innovative MSMEs”, which is a strategic focus of the government as it seeks to encourage private sector growth and reduce government fiscal burdens.

In a financial atmosphere where conventional funding sources are either overstretched or unwilling to lend to innovation-led startups, the growth of cryptocurrency-led financing solutions such as ICOs provides a welcome alternative to Malaysia’s budding knowledge economy. Seeing an opportunity for economic growth here, Malaysian authorities have taken a series of steps designed to facilitate such alternative investment avenues.

It has provided funding for the Co-Investment Fund, a program that works with equity crowdfunding and peer-to-peer financing platforms, designed to contribute a matching 25 percent sum alongside all private investment.

In Lim’s words:

“Through this, we hope to be able achieve faster fund disbursements to support a broader range of deserving MSMEs, as well as provide greater transparency to how public funding are being utilised.”

The move potentially comes as a significant boost to cryptocurrency adoption in the country after prior hints at coming crypto regulation. Earlier in the month, CCN.com reported that Lim addressed the Malaysian parliament stating that while the government is not opposed to cryptocurrency, it wants its regulatory guidelines to be followed.

Featured image from Shutterstock.