Malaysia Attaches to Recommendations for the Digital Currency

Digital currencies are expected to play a significant role in the gaming industry's future, and Malaysia is getting ready if it does have any role in that.

Securities Commission of Malaysia (SCM) has issued new recommendations for digital properties, effectively revising its previous advice as of 28 October.

The new guidelines cover a variety of companies concerned with digital currencies including exchanges, custodian services and initial Exchange Offerings (IEOS). The SCM stated that the new guidelines were intended to encourage “responsible innovation in the digital asset space, while at the same time managing emerging risks and safeguarding the interests of issuers and investors.”

The regulator's initial guidance laid down guidelines for fundraising by digital media. They come into force at the end of 2020, but these latest standards bring even more transparency to the vast spectrum of digital asset companies, and enable them to follow sensible regulations to protect consumers and other businesses in whom they are associate.

In particular, IEO platforms will also be expected to carry out due diligence procedures on issuers, evaluate the suitability to satisfy local requirements, and apply anti-money laundering criteria, as well as safeguards for terrorism funding. Services in detention would have to follow similar criteria.

Businesses will now begin to register with the SCM for licenses to serve as a custodian or IEO.

But to be sure, Malaysia has not declared a legal tender to digital currencies.

“Digital currencies and digital tokens are not recognized as a legal tender nor as a form of payment instrument that is regulated by Bank Negara Malaysia.” 

Nevertheless not all financial commodities must be used as currencies. As demonstrated by Bitcoin SV, the blockchain can be used as both transactions and as a network for data transfer. Gambling companies may log their wagers to the blockchain while still paying out their players with stablecoin tokens, making BSV's worth only a side factor of the chain business for fractions of a penny.

If Malaysia wants to become a potential player in the online gambling industry, this is an significant step. Philippine Amusement and Gaming Corporation (PAGCOR) indicated that Malaysia may be a new center for online gambling as its own country sees a industry migration caused by high tax rates and the pandemic.