November 24, 2017
By Joshua Althauser - November 24, 2017 (cointelegraph.com)
The Malaysian central bank, Bank Negara Malaysia (BNM), is expected to issue a directive to regulate the use of digital currencies in the country in early 2018. The central bank has been discussing and working on a proposed cryptocurrency regulation for some time now and this new development is expected to be hailed by industry players.
According to BNM Governor Tan Sri Muhammad Ibrahim, the introduction of regulations for virtual currencies are intended to prevent abusing the system for criminal and illegal activities and to maintain the stability and integrity of the financial system.
“The advent of digital currencies as some have forecast will mark the beginning of a new era in the financial sector. As authorities, we cannot be oblivious to these developments….The banking sector needs to adopt the latest and most advanced technologies to improve its risk management framework.”
Under the regulations, individuals who convert their virtual currencies into fiat currencies will be considered as reporting institutions and will be subjected to Malaysia’s Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act of 2001. This means that cryptocurrency transactions will be subjected to laws similar to those imposed on banks.
However, the implementation of regulations as a guide for digital currencies would not automatically mean that the virtual tokens are already accepted as legal tender in the country. It is just seen as an indication that the central bank is keeping an open mind on the new wave of innovative technologies being introduced in the financial sector.
November 23, 2017
By C. Edward Kelso - November 23, 2017 (news.bitcoin.com)
In order “to prevent the abuse of the system for criminal and unlawful activities and ensuring the stability and integrity of the financial system,” Bank Negara Malaysia Governor Tan Sri Muhammad Ibrahim stated 22 November 2017 that those trading in cryptocurrencies will be placed under the country’s existing anti-money laundering laws.
Malaysia Cites Terrorism Fear
Joseph Chin of The Star Online reports, “Bank Negara Malaysia is developing the regulatory structure for digital currencies, and from 2018 persons converting crypto currencies into fiat money currencies will come under anti-money laundering law,” he notes. Such persons “would be designated as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.”
The central bank’s Governor made his remarks at the Third Counter-Terrorism Financing Summit. It’s a four day conference organized by the bank, partnering with “Australia’s financial intelligence agency, AUSTRAC, and Indonesia’s Pusat Pelaporan dan Analisis Transaksi Keuangan (PPATK),” the website press release read.
The gathering brings “together more than 350 specialists and professionals from 35 countries and international organisations to share their insights on the latest terrorism financing (TF) issues and developments,” they emphasize.
Mr. Ibrahim’s talk was titled, Readying the Financial Sector Amid the Evolving War on Terrorism Financing, saying in part, “regulators must prepare themselves as digital currencies will become the new norm,” The Star Online paraphrased.
“We must harness the vast potential in technological innovations,” the central banker warned, “to reinvent and reinforce our lines of defence.”
Terrorism in Malaysia has a storied and long history, and is beyond the scope of the present article. But it is safe to write terrorism is something the Malaysian government can claim as a concern, regardless of it as pretext in the case of bitcoin.
“We need new tools,” Mr. Ibrahim said. “The adoption of artificial intelligence, machine learning, and big data technology are tools that would likely be imperative, as suspicious transactions become more complex and harder to detect,” he listed.
The Star Online notes further how the central bank head “said the advent of digital currencies, as some have forecast, will mark the beginning of a new era in the financial sector.”
Remittances Come Under Scrutiny
One undeniable area of bitcoin’s power resides in its ability to essentially be borderless, allowing those who wish to send money back to their home countries a frictionless experience for the most part.
Mr. Ibrahim is reported to have said “Bank Negara was in the midst of finalising the details of a new requirement for the Banking and Money Services Business sector to report remittances in high risk areas.”
“The high risk areas will be determined based on the law enforcement agency’s intelligence on areas that they view may pose higher risks for funding of terrorism activities,” The Star Online summarized.
The central bank hopes to incorporate more shared international intelligence on suspicious transactions.
As always, what exactly constitutes “high risk areas” and “suspicious transactions” is often left vague by government regulators. It appears to be the same in Malaysia.
A resident of Malaysia told news.bitcoin.com, “Laws are more like guidelines in Malaysia, the people just make their own decisions on what they want to follow. Even if crypto was banned people wouldn’t care. Technically [the song] ‘Despacito’ is banned in Malaysia,” he laughed.
Images courtesy of: Pixabay, BNM. Marcel Chuo contributed sourcing for this article.
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