Malaysia’s Bank Negara announced Wednesday that it is working on a regulatory framework over the use of cryptocurrencies in the country.
The regulation will come in place by end of the year under Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act. Though no exact date exists for the implementation.
The framework will help lessen risk of money-laundering and terrorism financing using cryptocurrencies.
Muhammad bin Ibrahim, governor at Bank Negara Malaysia mentioned the upcoming guidelines in a Kuala Lumpur counter-terrorism financing summit.
“We hope that by year end, BNM will be able to come out with some guidelines on cryptocurrency. Particularly those related to anti-money laundering and terrorist financing”.
Those converting cryptocurrencies into conventional currency will be under “reporting institutions” guidelines. Since the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act comes in place. They will need to put measures to prevent acting as conduits in money laundering and terrorism financing.
“This is to prevent the abuse of the system for criminal and unlawful activities. Thus, ensuring the stability and integrity of the financial system”.
The country has arrested many people in relation to terrorism financing and militant groups. But it is unclear how many used cryptocurrencies.
Meanwhile, absolutely central bank did not rule out the ban on cryptocurrencies.
Ibrahim’s remarks comes after the statements by Malaysia’s securities regulatory authority as well as comments regarding need for watchdog regulations for crypto trading.
However, recently, Ranjit Ajit Singh Security Commission (SC) chairman highlighted intentions by the authority to “acknowledge and embrace” the evolution and demand for crypto assets and said they “will work together with Malaysia’s central bank to “carefully apply the right framework”.