Malaysia’s Government Still Hasn’t Figured Out How To Implement Crypto Regulations

The situation regarding the legality of cryptocurrency in Malaysia is ‘hanging in the balance’ as the government still hasn’t come to a consensus regarding the legality of cryptocurrency and crypto-businesses.

Just last year, Malaysia’s Finance Minister warned companies to not issue new tokens and to wait for the central bank to give clear orders on the issue. Very recently, Malaysia’s Federal Territories minister, Khalid Abdul Samad stated that using cryptocurrency inside Malaysia was “neither legal nor illegal.”

This is because the authorities inside the government still haven’t come to a unanimous agreement regarding the regulations. Addressing the people who are interested to know about the issue, Samad stated,

“People have asked me if these currencies are legal or illegal…At the moment, the answer is neither legal nor illegal as the situation is still unclear.”

Samad himself, however, seems to be on the side of cryptocurrencies being legal, as he was involved in the invention of the Pakatan Harapan token that is being used to raise political funding for Malaysia’s ruling party, in anticipation of the 2019 general elections. Malaysia’s Central Bank, Bank Negara, however, has yet to approve of the initiative.

Samad conceded that despite him being on the side of cryptocurrencies, he didn’t have much sway inside the government in this decision as he “was not appointed as Finance Minister.” As such, the matter is out of his jurisdiction and he cannot push too much on the issue, and the government has remained in the middle, refusing to sway towards either one or the other side.

Malaysia hasn’t been clear on the status of cryptocurrency for some time now. Currently, Bitcoin and other digital currencies aren’t recognized as legal tender in the country, but as they aren’t banned, individuals or companies trading them are not protected by law.

In November 2018, the Finance Minister, Lim Guan Eng issued a warning to people and companies urging them to not issue new cryptocurrencies until the Central Bank had released a fixed opinion regarding the issue. He said,

“Don’t do it without Bank Negara’s guidelines or directive on the matter to avoid doing something wrong and against the law.”

He added that the government wasn’t going to crack down on new forms of virtual currencies, as long as they adhere to the law. Politicians have previously raised concerns over the status of cryptocurrencies in one of south-east Asia’s most prosperous economies, citing concerns that it could pose a threat to the functioning of the national currency, the Ringgit.