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Reference is made to a recent Letter to Editor by DR PAUL SELVA RAJ, CEO, FOMCA, titled “Policy confusion over cryptocurrencies”, published in The Star and Malaysiakini on 7 and 9 December 2020 respectively.
Bank Negara Malaysia (BNM) and the Securities Commission Malaysia (SC) have been working collaboratively to develop policies and regulations related to cryptocurrencies and digital assets, with the aim of facilitating responsible innovation while managing any emerging risks related to this nascent sector. For the purposes of digital assets, BNM and SC are regulating a specific set of business activities. This was stated in a joint statement issued by BNM and SC on 6 December 2018.
BNM's role as the overseer of payment systems is to ensure the safety, reliability, and efficiency of payment systems and instruments. Privately-issued digital assets such as cryptocurrencies are not suitable as a general payment instrument as they do not exhibit the universal characteristics of money and face some limitations, including price volatility and vulnerability to cyber threats. Accordingly, digital assets are not a payment instrument that is regulated by BNM and does not constitute money that is legally accepted for the exchange of goods and services (not a legal tender) in Malaysia.
However, digital assets do have multiple use cases, including as an investible class of assets. As the regulator of the capital market in Malaysia, the SC has prescribed digital assets as securities under its laws. Pursuant to this, digital assets can be issued by a company for the purposes of raising funds subject to the issuer fulfilling the conditions set by the SC.
The Guidelines on Digital Assets referred to by Dr Paul Selva Raj seek to provide a framework for the issuance of digital assets in Malaysia for the raising of funds, while guidelines have also been issued by the SC to regulate online platforms which facilitate the trading of digital assets. These guidelines do not in any way promote digital assets as a legal tender or a general payment instrument.
For more information on digital assets, the public may visit the SC website, contact the SC’s Consumer and Investor Office at tel: +603 6204 8999 or e-mail: email@example.com, or contact BNMTELELINK at tel: 1-300-88-5465 (1-300-88-LINK), e-mail: firstname.lastname@example.org or via eLINK at https://telelink.bnm.gov.my/
BANK NEGARA MALAYSIA
SECURITIES COMMISSION MALAYSIA
16 December 2020
Bank Negara Malaysia
16 Dec 2020
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