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At a financial crime conference this week the governor of Malaysia’s central bank announced that there may end up being an all-out ban on cryptocurrency – but not quite yet. The head of Bank Negara Malaysia (BNM), Tan Sri Muhammad Ibrahim, says that a final decision will be made by the end of the year.
“Just wait. Now is only October. In less than three months, we will give you the details,” Ibrahim said.
Cryptocurrency investors on standby
Speaking at the 9th International Conference on Financial Crime and Terrorism Financing (ICFCT), the governor said that there would be official guidelines figured out before the end of 2017. But that’s only if the country decides to not ban it as a legal instrument.
“The guidelines 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,” the governor added.
Specifically, BNM would be crafting guidelines that would tackle terrorism financing or money laundering schemes.
Will Malaysia follow in the footsteps of its neighbors?
The anonymous, illegal, and oftentimes fraudulent activities that happen in the cryptocurrency space are the very reasons that two other countries in the region have imposed bans. Last month, China began prohibiting initial coin offerings (ICOs) and shutting down popular cryptocurrency exchanges.
After that, South Korea announced that – for the same reasons – it was halting any future ICOs and margin trading in virtual currencies.
Meanwhile, Japan has made cryptocurrency a legal tender. It also recognizes a small group of organizations as exchange operators. In order to be a registered cryptocurrency company in Japan, however, there are guidelines. They must have strong enough systems and allow for anti-laundering identity checks.
Whether Malaysia imitates Japan or its other neighbors is up in the air, but we will know come January. Beginning on January 1, any and all details will be made transparent. The governor says that that is “ample time” for financial institutions to get their systems ready and prepare their employees.
“We expect financial institutions to adhere to strong compliance and corporate governance standards,” he added. “We have not hesitated to impose hefty fines when circumstances warranted such action.”