By Lim Guan Eng, the finance minister of Malaysia recently revealed to the public that newly developed set of comprehensive regulations which will guide the activities of cryptocurrency exchanges and ICOs will be put into effect as early as the first quarter of 2019.
While speaking at the FinTech Conference 2018 in Kuala Lumpur on Wednesday, which was organized by Malaysia’s Securities Commission, Eng revealed that these new regulations form part of plans cooked up by the Malaysian Securities Commission (SC) to drive new growth means in terms of alternative fundraising and investment in new asset classes.
Does This Mean A Comprehensive Regulatory Finance Framework?
It was during the keynote address at the conference where Eng made the announcement, stating that the system was a joint development by Bank Negara Malaysia (the nation’s central bank) and the SC and would in effect serve as a comprehensive regulatory framework for all participants in the crypto arena. Eng also added that in light of the atmosphere of suspicion, consumer protection took the main priority in making the decision:
“While some parties might still be sceptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors. […] Both Bank Negara and the SC, in terms of formulating this framework will be under the auspices of the Finance Ministry. The Finance Ministry will lead the committee comprising of Bank Negara, the SC, and the MOF itself.”
According to Eng, this regulatory framework forms an integral part of the government’s efforts to fuel the growth of alternative financing options for “high potential and innovative MSMEs”, which is currently a primary strategy for the government as they seek to encourage growth within the private sector as well as reduce any fiscal burdens on the government.
In the current financial ecosystem whereby the conventional means of funding have all but been overstretched or unwilling to lend to startups, the adoption of crypto-integrated solutions, for example, ICOs provide a much-needed alternative to Malaysia’s growing economy of knowledge. Having seen the light and opportunities for economic growth, the Malaysian government have started to take the necessary steps towards facilitating these kinds of alternative investment opportunities.
The Malaysian government has in fact begun providing funding for the Co-Investment Fund, which is a program that works alongside equity crowdfunding as well as peer-to-peer finance platforms which are designed in order to contribute a matching 25% alongside any private investments.
Eng explained:
“Through this, we hope to be able to achieve faster fund disbursements to support a broader range of deserving MSMEs, as well as provide greater transparency to how public funding is being utilized.”
This move of course, comes as a massive boost towards crypto adoption in the nation after earlier hints at impending crypto regulation. Earlier this month, it was reported that Eng had addressed the Malaysian government stating that while the powers that be are not opposed to cryptocurrency, they want their regulatory guidelines to be adhered to.
Could this be good news for crypto adoption in the nation? Or do you feel regulation defeats the sole purpose that digital currencies were created for in the first place? Let us know your thoughts.
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