Malaysia to Decide on Bitcoin Ban by Year End

11-Oct-2017 Intellasia | Investopedia | 6:00 AM Print This Post

Malaysia, where bitcoin is currently unregulated, will make a decision on whether to ban the cryptocurrency by the end of this year, according to the governor of the country’s central bank.

“This (ban on cryptocurrencies) is something that we will decide on by the end of the year,” said Muhammed bin Ibrahim, governor of Bank Negara Malaysia (BNM). However, his subsequent statements provided strong hints that the chances of such a ban are low. “The guidelines (relating to bitcoins) that we will be issuing before the end of the year will address issues in terms of registering the players, collecting data and ensuring that whatever they do will be transparent,” he said.

The Chinese ban on initial coin offerings (ICOs) and bitcoin exchanges last month resulted in a capital outflow and spurred Malaysia’s local bitcoin markets to “record highs,” according to some estimates. However, the currency has largely remained unregulated. In 2014, BNM issued a statement to specify that bitcoin was not recognised as “legal tender” in the country and that the bank did not regulate operations of the cryptocurrency. Last month, BNM also issued a statement warning investors about ICOs.

According to some observers, bitcoin legalisation could provide an alternate route for exchanging currencies. The Malaysian ringgit has been subject to strict capital controls after President Trump’s election victory (and a subsequent dollar surge) resulted in a massive devaluation for the currency. Multinational banks and investors have been especially hard hit because they are unable to convert local currency into dollars. Expatriate remittances to Malaysia have also suffered. With its decentralised networks that run across borders, bitcoin could ease the flow of capital into and out of the country.

The assistant governor of Malaysia’s central bank provided further hints on his agency’s approach to assessing bitcoin regulation. He said the government’s objective was “to balance between safeguarding our economy and allowing room for innovation and progress,” adding that the government might revise its anti-money laundering policies.

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Category: Malaysia

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