[2017-11-22] Central Bank of Malaysia Plans Crypto Reporting Rules

[iamTom123]

The governor of Malaysia's central bank, Bank Negara Malaysia (BNM), has provided more detail on its upcoming regulatory framework aimed to counter the illicit uses of cryptocurrencies. In statements made today at a counter-terrorism financing summit, BNM governor Muhammad Ibrahim said the new rules are being drawn up to combat the financing of money-laundering and terrorism in the country.

Under the framework, those who convert digital currencies into conventional money will be termed as "reporting institutions" from next year, under the country's anti-money laundering and anti-terrorism financing act. Reporting institutions are obliged by law to take preventive measures, such as submitting suspicious transaction reports, to avoid acting as a channel for illicit money transmission.

Ibrahim added: "This is to prevent the abuse of the system for criminal and unlawful activities and ensuring the stability and integrity of the financial system."

Earlier this month, Malaysia's securities regulator, Securities Commission Malaysia, also revealed it is planning a regulatory framework for cryptocurrencies. Aimed at "market integrity and investor projection," the agency indicated that it is working with central bank during the process. Read more here...

I always preferred regulations no matter how tough they can be over what China did last September which affected Bitcoin too much before making a big surge when the market realized that China can never kill nor stop Bitcoin. I am sure that the market in Malaysia can also be sizable and now that it is already regulated and allowed to freely move under certain conditions and procedures then there is a big opportunity in this country for Bitcoin to slowly get its mooring. We are all hoping that Malaysia can be the model country for Muslim countries embracing Bitcoin and allowing their people to get involved with the financial revolution represented by Bitcoin.

Let's welcome Malaysia to the Bitcoin bandwagon!

[Zicadis]

Its a good initiative by Malaysia's central bank which is better than banning it, the central bank must be commended for this as this also gives confidence to cryptocurrency users in Malaysia as they will now freely use cryptos without uncertainties and I see a rise in crypto users as well but then again this idea of reporting institutions what will guarantee them that they will be effective in carrying out their new responsibilities ?

[Irvinn]

If banks and other authorities simply inform the relevant law enforcement agencies of suspicious transactions in the fight against illegal money laundering and terrorism, then this is still an audible preventive measure. Such measures can only be welcomed. For example, in Russia, there is only this will not do. And Malaysia, it is necessary to believe, will soon join the world crypto-currency community.

[Domenc]

No doubt, rising fame of Bitcoin has fueled the conversation of money laundering and other illegal activities due to Bitcoin, due to which provinces are left with 2 choices only either imposing a ban or imposing regulations. And for me both are not approximate choices.

I always preferred regulations no matter how tough they can be over what China did last September which affected Bitcoin too much before making a big surge when the market realized that China can never kill nor stop Bitcoin.

Regulations for Bitcoin and crypto currencies will simply lead to centralized system where government can track your transactions and make rules according to one wish. All these circumstances will eventually lead to conversion of decentralized system into centralized again. But what’s more authenticating is imposing ban on Bitcoin and crypto currencies to end Money laundering and anti-terrorism financing activities but both these activities will continue to play in role even after the ban and will only affect every day Bitcoin users.
Illegal activities and terrorism is going to spread no matter which currency is banned from transaction, negativity will always find way to publicize, but to end these entire things one cannot simply eradicate Bitcoin or other things. One should end and burst terrorism and money laundering activists rather than busting down Bitcoin and crypto currencies.  

[secondgarlic]

Good. The more countries willing to legalize and regulate bitcoin, the more legitimacy the currency will have.

[jjacob]

Are there any thresholds for such reporting. Just converting cryptocurrencies into fiat (say by an individual on local bitcoins) shouldn't trigger any reporting requirements. This should be restricted to large exchanges who deal with a lot of customers.

[Kemarit]

Are there any thresholds for such reporting. Just converting cryptocurrencies into fiat (say by an individual on local bitcoins) shouldn't trigger any reporting requirements. This should be restricted to large exchanges who deal with a lot of customers.

I think you are correct, it should only be restricted to exchanges for strict KYC/AML compliance like what the Philippines did earlier before adopting it.

Its a good initiative by Malaysia's central bank which is better than banning it, the central bank must be commended for this as this also gives confidence to cryptocurrency users in Malaysia as they will now freely use cryptos without uncertainties and I see a rise in crypto users as well but then again this idea of reporting institutions what will guarantee them that they will be effective in carrying out their new responsibilities ?

Yes, its a good initiative in a step forward towards regulating bitcoin in Malaysia. Though like any Southeast Asia nation, it is a small country and this news should not put a heavy impact on the current prices but the good thing is that Malaysia bitcoin community should consider this a victory because they are lot of country turning its back against bitcoin, while Malaysia is giving it a chance to flourish which will benefit them.