No Plans to Ban Cryptocurrencies: Malaysian Official

Malaysia’s deputy finance minister confirms a blanket ban is not on the cards for digital currencies, although proper regulations will be imposed.

Deputy finance minister of Malaysia, Datuk Seri Johari Abdul Ghani, has confirmed that the government has no plans to impose a ban on cryptocurrency trading. 

In an interview with The Malaysian Reserve, Johari stated that a ban was not in the interests of the government, as it would halt innovation and developments in the finance and fintech industries.

“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.”

Johari went on to observe that innovation in the finance sector “will not only enhance productivity of economic activities, but also make financial intermediation more seamless”.

Bitcoin’s record-breaking bull run to $20,000 in 2017 and the subsequent price surges among alt coins have led to a massive increase in the popularity of the cryptocurrency industry. However, owing to its unregulated nature, the crypto market has set alarm bells ringing for governments and financial regulators worldwide. 

The need to protect investors and prevent the usage of cryptocurrencies in illegal activities has prompted many authorities to tighten the noose around digital currencies – South Korea, for example, recently announced stricter regulations for crypto exchanges, which will put an end to anonymous accounts and ensure greater compliance to KYC rules.

Johari, however, stated that the Malaysian government was “aware of the need to strike a balance between public interest and integrity of the financial system”, and would be adopting a cautious, balanced stance on crypto, to ensure the protection of the public without stifling innovation. However:

“… similar to any financial and investment schemes, there is a need to have proper regulation and supervision to ensure any risk associated with such schemes are effectively contained.”

Although the Bank Negara Malaysia (BNM) currently does not regulate cryptocurrencies, a framework is under development, with a particular emphasis on preventing money laundering, fraud, and terrorism financing.

Johari confirmed that the central bank will require cryptocurrency exchanges in the country to conduct KYC due diligence, and report any suspicious activity to the authorities. This information will then be made available to the public and all relevant authorities. Not only will this enable the authorities to manage the crypto market, but it will also help investors make more informed decisions and make cryptocurrencies more transparent, so that everyone can understand the risks.

Once cryptocurrency regulations have been implemented, the central bank may even move to recognize regulated crypto exchanges.