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Economics and regulation
Lim Guan Eng, the finance minister of Malaysia, has warned people and companies that intend to release new cryptocurrencies with a stern: "do not do it". Addressing the parliament on 26 November, Guan Eng advised to wait for the legal guidance of Bank Negara Malaysia, the central bank of the Southeast Asian country.
Read also: Law firm: the draft of South Africa could affect the use of cryptocurrency
Wait for the Central Bank's guidance
"Do not do it without the Bank Negara guidelines or directive on the matter to avoid doing something wrong and against the law," Guan told parliament today. He was responding to a legislator who wanted to know what the government was doing to stop the cryptocurrencies causing "problems" for the local fiat unit, the ringgit.
One of the most common ways to create a new virtual currency is through fundraising models such as Initial Coin Offerings (ICOs). It could be that the Malaysian finance minister was talking with this in mind, especially considering how a number of Icos throughout the world have been shipwrecked, turning out to be nothing but mere frauds.
"We have to be cautious, given that Bank Negara is the authority that manages and manages all forms of new currency technologies," said online newspaper The Star Online. The finance minister said that the government is open to emerging forms of money such as virtual currency, but only if they adhere to the law.
Bitcoins and other digital currencies are not recognized as legal tender in Malaysia, but they are not even banned. This means that individuals or companies that negotiate cryptocurrency are free to do so, but they are not protected by law. However, under the legislation governing money laundering, all encrypted stock exchanges operating in Malaysia are subject to their reporting obligations.
Ringgit under threat?
Previously, Datin Paduka Dr Tan Yee Kew, MP (MP), asked the finance minister if the government would set up a statutory body for the regulation of the digital goods industry in Malaysia. The Member was particularly concerned about the threat posed by the cryptocurrency on the normal functioning of the ringgit.
In response, Guan Eng said:
I'm sure there are those who try to introduce their mechanism. It is here that I wish to advise all parties, no matter who they are, with the intention of issuing bitcoins or cryptocurrencies, which should refer to Bank Negara who is the authority that will have the final say on this new currency form.
During the same parliamentary session, a deputy asked for explanations on the "harapan currency", claiming that he had illegally collected money without the approval of the central bank of Malaysia.
"Although it is a new initiative and has not yet obtained approval, it is reported that the currency is trading at $ 45 per 100 units and has since collected $ 772", accused the MP.
The harapan currency is an initiative of Khalid Samad, the minister of the country's federal territories, which aims to use the token to raise political funds for the ruling party of Malaysia, Pakatan Harapan, in preparation for the general election of 2019. Samad said he had presented harapan money documents to Bank Negara for approval.
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