PETALING JAYA: Digital currency exchangers are somewhat relieved by Bank Negara Malaysia’s (BNM) release of its policy document on digital currencies as it gives more certainty to the development of the digital currency industry in Malaysia.
With no prohibition on bank dealings with digital currency exchangers or businesses, digital currency players say the move can strengthen the market and investors’ confidence in digital currencies.
Luno Malaysia marketing/community lead Aaron Tang said the guidance provided by BNM’s policy document is a positive development.
“We welcome collaboration with banks and other financial institutions. We believe that the latest news from BNM will further encourage financial institutions to get involved in the digital currency ecosystem,” he said in an email reply to SunBiz.
When contacted, PinkExc co-founder Fitry Daud lauded the 50-page policy document outlining proper processes, from reporting obligations to the dealing with banks and the verification of a customer’s identity.
He said PinkExc, one of the most active digital currency exchangers in the country, will slowly migrate its customer verification process, which is currently done over-the-counter through thumbprint and identity card, to one that is web-based.
BNM’s policy paper allows for the use of electronic means for customer due diligence or verification of a customer’s identity, only stipulating that the methods must satisfy the requirement under Section 9.3.3, which calls for the process to be as effective as one that is done face-to-face.
As for Luno, Tang said it has already been practising identity verification procedures that fully meet BNM’s requirements.
Fitry noted that BNM’s move of releasing the policy document, despite not recognising digital currencies as legal tender, will at least not keep the investors away from the new era of digital and fintech. “It’s a sad story if we don’t embrace the advanced technology of blockchain.”
Nonetheless, Fitry said the central bank has to address the issue of money laundering and terrorist financing activities through digital currencies, which would have a negative impact on the country.
On the imposition of tax on currency trading profits, Fitry is hoping that the Inland Revenue Board could provide clarity on the issue. “We need to know whether it is a income tax or GST (Goods and Services Tax).”