Malaysia’s Central Bank issues Proposed Digital Currency Regulations for Public Review

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Cryptocurrency Regulation News

Recently, the Bank Negara Malaysia (BNM), the country’s central bank, has issued the drafted digital currency regulatory guidelines for the citizens and businesses in the region. the new regulations will fall under the nation’s anti-money laundering and anti-terrorism financing act of 2001. If the guidelines are approved, the cryptocurrency trading platforms must provide the asset trade volume statistics, be identifying all customers, and also be monitoring the transactions which take place out of the exchange.

 

The bank says, ‘The Digital Currency Exchangers must declare the Details’

Bank Nagara Malaysia, (BNM),  has claimed to draft the digital currency exchange regulations for public consultation. The laws will be applied for all trading platforms those deal with the cryptocurrencies, and only one individual can be considered an “exchange” if they sell the digital assets. For huge operations, there will be “transparency obligations” where the trading platforms will be required to provide the data to the BNM’s reporting entity.

The bank described:

“A digital currency exchanger must also declare its details to the Bank as a reporting institution, failure to declare its details as reporting institutions or comply with the reporting obligations may subject the digital currency exchangers to the enforcement and non-compliance actions as provided under the AMLA as well as the potential termination or denial of use of financial services in Malaysia.”

 

Cryptocurrencies such as Bitcoin are not the Legal Tender in Malaysia

Including that, Exchanges should also obey the Know-Your-Customer (KYC) requirements while registering the customers. The aim of verifying a user’s identity is for providing the adequate measures against the money laundering, the terrorist financing and explains the bank details that digital currencies are still not officially regulated and there will no particular risks which are tied for operations dealing with the cryptocurrencies before the laws are enacted.

The bank’s draft describes:

“The public is reminded that digital currencies are not legal tender in Malaysia, the members of the public are advised to carefully evaluate the risks associated with dealings in digital currencies. This includes risks arising from high volatility in prices, the lack of deep markets and vulnerabilities to cyber-attack which can lead to significant losses. Users of digital currencies will also not be covered under established disputed resolution arrangements which exists for regulated financial institutions in the event of any dispute or losses.”

These guidelines are considered as the beginning method for making the digital assets transparent in the country. BNM says they will monitor the bitcoin and other cryptocurrencies to collect the risks on retailer investors face. Moving forward, the central bank is also welcoming the written feedback in regard to the drafted legislation, and responses which can be due by January 14, 2018.