Bank Negera Malaysia, the central bank of Malaysia will be deciding on how to regulate digital currencies in the country. There is also a possible ban on the cards according to one local news source.
Although this may be a desirable outcome for any central bank, many are learning just how hard that can be. China has recently shut down some of their cryptocurrency exchanges. However, traders will always find a way to buy and sell an asset that is by its very nature borderless.
What Next?
Digital currencies can be sent and received anywhere in the world where there is internet activity. As such, it is hard to see how any country can possibly eliminate the use of these cryptocurrencies in their entirety. However, there are a few things that the authorities can do in order to at least limit trading.
Firstly, they could look at the current banking environment and see how they could restrict any interaction with the digital currencies and the Fiat money system. This would mean that any centralised exchanges would not have an opportunity to take funds from Malaysian citizens. However, this could just drive trading to decentralised peer-to-peer systems.
An updated position by the bank is expected sometime within the next few months. It is indeed interesting to speculate which angle they will take. They could adopt the China model or they could embrace the technology like many other Asian countries.
They could also consider instead of outlawing digital currencies in their entirety, they could limit ICO issuance. These are a method by which many start-ups have raised funds over the past 2 years through coin offerings. Many consider these as dubious proposals and countries such as South Korea have banned them.
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