Malaysia’s Stand On Cryptocurrency

The value of Bitcoin and other digital currencies has soared in recent months, with some investors seeing it as a potential hedge against inflation.

However, there are also concerns over their lack of regulation and volatile prices. With this, the Malaysian government has said that it does not recognise cryptocurrency as legal tender. This follows a similar announcement made by the country’s central bank last month.

Malaysia’s Stand on Cryptocurrency As a Legal Tender

The government’s stance was announced in a statement released by the Prime Minister’s Office on Wednesday. “The Government does not recognise cryptocurrency as legal tender in Malaysia,” the statement said.

It added that the government is “committed to developing the digital economy” but cautioned that any activities related to cryptocurrencies must be compliant with anti-money laundering and terrorism financing laws.

In a statement, the country’s central bank said that “the risks associated with crypto assets are still high”. It added that any companies wishing to operate in the space would need to obtain a license from the relevant authorities.

Those who breach the law will be “dealt with sternly”, the statement said.

History of Cryptocurrency in Malaysia

Cryptocurrency trading platforms in Malaysia have been subpoenaed by the country’s central bank, Bank Negara Malaysia (BNM), as part of an investigation into the matter.

In January, BNM governor Tan Sri Muhammad Ibrahim said that the central bank did not recognise cryptocurrency as legal tender and that it was not regulated by the bank.

He advised the public to be cautious when investing in cryptocurrencies, noting that they are “unregulated and volatile”.

 Cryptocurrencies have come under scrutiny in recent months amid concerns over their lack of regulation and volatility.

In December last year, the US Securities and Exchange Commission (SEC) charged two initial coin offerings (ICOs) with fraud, while China has cracked down on cryptocurrency trading platforms and ICOs. 

This is not the first time that the Malaysian government has taken a cautious stance on cryptocurrency. In 2014, the central bank issued a warning against investing in digital currencies, saying that they were not recognised as legal tender and carried a high risk of loss.

Malaysia is not the only country to take a cautious stance on cryptocurrencies. Earlier this month, South Korea’s financial regulator said that it was considering banning cryptocurrency trading, while China has also taken steps to crack down on the practice. In the United States, regulators have taken a more hands-off approach but have warned investors about the risks associated with investing in digital currencies.

The government has, however, said it is open to the idea of using blockchain technology – the distributed ledger system that underpins cryptocurrencies – in public sector initiatives.

As of today, under Malaysian law, only the Ringgit is legal tender. This means that businesses are not obliged to accept cryptocurrency as payment, and consumers cannot use it to pay taxes.

Cryptocurrency in Malaysia Today

Despite this, there is a growing community of cryptocurrency enthusiasts in Malaysia. The country is home to two of the world’s largest Bitcoin exchanges, and its capital city Kuala Lumpur is often referred to as the “Bitcoin capital of Asia”. However, it remains to be seen whether the Malaysian government will change its stance on digital currencies in the future.