PETALING JAYA: The government’s view on digital currencies and e-wallets is that it should be part and parcel of Malaysia’s digitalisation roadmap.
Second Finance Minister Johari Abdul Ghani said this in an interview with The Malaysian Reserve (TMR) recently, adding such financial innovation will ensure the country captures the digitisation value chain across the board.
“Financial innovation will not only enhance productivity of economic activities, but also make financial intermediation more seamless.
“That is why Bank Negara Malaysia will not impose a blanket ban on cryptocurrencies, including bitcoin, because that will only curb innovation and creativity in the financial sector, particularly financial technology,” he was quoted as saying by the business daily.
However, Johari said that the central bank will take a cautious approach with digital currencies, such as bitcoin to protect the interest of the public.
“The government is fully aware of the need to strike a balance between public interest and integrity of the financial system.
“It is not the intention of the authorities to ban or put a stop on any innovation that is perceived to be beneficial to the public,” he told TMR, adding that it was imperative for regulators to have a thorough understanding on digital currencies before implementing any policy.
“Similar to any financial and investment schemes, there is a need to have proper regulation and supervision to ensure any risk associated with such schemes are effectively contained.”
Johari admitted that BNM does not currently regulate digital currencies but there are plans to recognise regulated digital currency exchanges (DCEs).
“BNM will ensure they comply with requirements to conduct customer due diligence and report suspicious transactions to the authorities.
“However, such recognition will only be done once the proper cryptocurrencies regulation are in place,” he told TMR.
He added that BNM will follow measures taken by regulators in Australia and China recently, using information obtained from the DCEs and making it available to the public.
“This would help both the public and relevant authorities, including BNM, to make informed decisions relating to the market.”
In the meantime, Johari said, Malaysians must remain cautious in dealing with digital currencies, especially with the inherent risks online, such as hacking and price volatility.
‘Not based on anything tangible’
This correlates with the comments from a cybersecurity expert whom FMT spoke to recently.
CF Fong, who is the founder of security services firm LGMS, said he personally would not invest in the cryptocurrency because it’s not based on anything tangible.
“Essentially, the bitcoin has become a religion because people believe the values are assets and that is why the value appreciates.
“But in essence, it is based on nothing. If you believe it is worth 20,000, it will be worth 20,000. If you believe it is worth zero, it will be zero,” Fong told FMT.
“If one day the belief system collapses, the whole game will collapse.”
He advised those thinking of joining the bandwagon of investors to first study the currency’s mechanism.
Bitcoin is far from the only cryptocurrency. There are now well over 1,000 rivals, according to trade website Coinmarketcap.