As Malaysia’s central bank develops guidelines for cryptocurrencies like bitcoin, a blanket ban is still not out of the question according to its governor.
Bank Negara Malaysia (BNM) governor Muhammad bin Ibrahim was speaking to reporters on the sidelines of the 9th International Conference on Financial Crime and Terrorism Financing in Kuala Lumpur when he spoke about upcoming regulations for the cryptocurrency sector.
As reported by The Malaysian Insight, the central banker did not rule out a complete ban on cryptocurrencies.
He stated:
This (ban on cryptocurrencies is something that we will decide on by the end of the year…The guidelines that BNM is set to announce by the end of the year would reveal the country’s approach to cryptocurrencies.
Ban? Unlikely
The very notion of a complete ban comes in the aftermath of stringent regulations against the bitcoin and wider cryptocurrency sector in China. BNM’s Chinese counterpart, the People’s Bank of China, enforced a complete ban on all initial coin offerings (ICOs) in September, a decision which has since snowballed into leading to the shuttering of bitcoin exchanges in mainland China. Authorities in South Korea have followed suit with a ban on ICOs.
However, it is still unlikely that Malaysia would mandate a sweeping ban on cryptocurrencies. As CCN reported in September, Ibrahim was quoted as stating:
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. We want to ensure that there are clear guidelines for those who want to participate in this sector.
Those ‘clear guidelines’ could be seen as a precursor to rigid regulations that would effectively see the central bank allow cryptocurrency activity, under its rules. That would include “collecting the data, and also making sure whatever they [cryptocurrency traders and adopters] do will be (made) transparent,” according to Ibrahim.
When pushed by reporters to reveal more, Ibrahim confirmed the central bank would make clear its intentions before the end of the year. “Just wait. Now [it] is only October. In less than three months, we will give you the details.”
The central bank’s official stance on bitcoin, from 2014, proclaimed “the central bank does not regulate the operations of Bitcoin,” with the cryptocurrency “not recognized as legal tender.” More recently, Malaysia’s securities regulator issued a public caution over ICO investments soon after China’s sweeping ban.