Just recently, the Bank Negara Malaysia (BNM), the country’s central bank, has issued drafted digital currency regulatory guidelines for citizens and businesses residing in the region. The new regulations will fall under the country’s anti-money laundering and anti-terrorism financing act of 2001. If the guidelines are approved, cryptocurrency trading platforms must provide digital asset trade volume statistics, identify all customers, and also monitor transactions going in and out of the exchange.
The Bank Negara Malaysia: ‘A Digital Currency Exchanger Must Declare Its Details’
The central bank of Malaysia, BNM, has issued a draft of digital currency exchange regulations for public consultation. The laws will apply to all trading platforms that deal with cryptocurrencies, and any one individual can also be considered an “exchange” if they sell digital assets. For larger operations, there will be “transparency obligations” where trading platforms will be required to provide data to the BNM’s reporting entity.
“A digital currency exchanger must also declare its details to the Bank as a reporting institution,” explains the central bank.
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 Like Bitcoin Are Not Legal Tender in Malaysia
Additionally, exchanges must comply with Know-Your-Customer (KYC) requirements when registering customers. The goal of verifying a user’s identity aims to provide adequate measures against money laundering, and terrorist financing, explains the bank. Further, the bank details that digital currencies are still not officially regulated, and there are significant risks tethered to operations dealing with cryptocurrencies before laws are enacted.
“The public is reminded that digital currencies are not legal tender in Malaysia,” the bank’s draft states. “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.
Malaysian Citizens and Businesses May Write Written Feedback About the Proposed Laws
The proposed guidelines are considered the first steps towards making digital assets transparent in the country. BNM says they will be monitoring bitcoin and other cryptocurrencies to assess the risks retail investors face. Further, the central bank is welcoming written feedback in regard to the drafted legislation, and responses are due by January 14, 2018.
What do you think about the Bank Negara Malaysia and its proposed digital currency exchange legislation? Let us know what you think in the comments below.
Images via Shutterstock, and Bank Negara Malaysia
At News.Bitcoin.com all comments containing links are automatically held up for moderation in the Disqus system. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.