Opinions

Why Is Formulation of Crypto Regulations In Malaysia Still A Work In Progress?

It has been more than a decade since Bitcoin first came out and to date cryptocurrencies have not been legalized all over the world. Where some of the countries have permitted their sale and purchase, some have outrightly banned the use and adoption of cryptocurrencies. Regardless, cryptocurrencies are now more well known than before and there are many who seek global adoption. Hundreds of blockchain based projects exist, many of which have their own token and coin, which people can buy from their Initial Coin Offerings. These have certain utility which cannot be utilized all over the world unless crypto is legalized.

The reason governments have been so vacillating about regulating crypto is that it had been used for numerous nefarious purposes in the past that includes money laundering various other criminal activities. The need of a regulatory framework that constitutes laws to govern the trade of cryptocurrencies is growing and more in demand than it ever was before.

Last year in December, Malaysia’s finance regulator and central bank claimed that cryptocurrencies and their Initial coin offerings will be regulated by the first quarter of 2019. These regulations were being charted up in order to protect the interests of the investors in the digital currency and to also help control the trade o cryptocurrencies in the country. The Finance Minister even took the liberty to advise Malaysian developers to first discuss the nature of their cryptocurrency with the institution that would be finalizing the regulatory framework, Bank Negara Malaysia.

But in recent reports the stance of the Malaysian government about regulating cryptocurrencies yet remains unclear. The Federal Territories Minister Khalid Abdul Samad, who had previously been an advocate of cryptocurrencies and tried to persuade Bank Negara Malaysia and Prime Minister Tun Dr Mahathir Mohamad to use the Harapan Coin, a cryptocurrency, for government transactions, told when asked about the legal status of cryptocurrencies,

 

At the moment, the answer is neither legal nor illegal as the situation is still unclear.

The minister agreed to have been involved in the launch of the Harapan coin, but had been appointed as federal territories minister instead of the finance minister. Therefore the matter of regulation of cryptocurrencies had not been under his jurisdiction and could not comment any further.

According to the minister, the jury is still out on whether crypto should be regulated or not. Previously, the minister received a lot of backlash for backing the Harapan coin. The reason being that the 30% of funds that were raised by the Harapan Coin ICO would go to the system administrators, who are all still unnamed. But another 30% will be allotted to Khalid Samads political party, Amanah, which would allot a rather higher stance to it compared to the other ones. The politicians belonging to parties other than that of Samads also detested it.

Samad, however, represents only  a number of  politicians who seem to have amiable feelings towards cryptocurrencies. There are still many who owing to the fact that cryptocurrencies have extremely volatile nature and can be used by masses to carry out transactions under complete anonymity detest the technology and have deemed regulatory framework for them a necessity.

To conclude, cryptocurrencies have had their image tainted by many of the controversies that have sprouted in the past few years. According to some where major price fluctuations may make it an unworthy investment, others view it as a revolutionary tool and a worthy replacement to the fiat. It is the biased practices in which institutions are delving into the technology for rather selfish purposes, that are further driving away the possibility of global adoption and hesitancy among the incumbent institutions to regulate crypto.

Habibah Shahid

A Computer Science student but a writer at heart. Habibah writes about Cryptocurrencies and the underlying technology, Blockchain, with the perspective of a Computer Scientist. Email: Contact the editor at editor.news@blockpublisher.com

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