The Malaysian government has yet to release its regulations for the cryptocurrency industry, but plans to enforce these as soon as the first quarter of next year.
Finance Minister Lim Guan Eng said that he had been informed by the country’s Securities Commission (SC) that it would use the new regulations to help provide fundraising to companies via alternative means.
He said, “We are keen on the continued development of such alternative financing avenues for these businesses beyond the traditional channels of financing,” according to local outlet The Star. He was speaking at a conference organized by the SC.
Lim noted persistent skepticism about the industry, but said, “[T]here can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors.”
The regulations would cover not just initial coin offerings (ICOs), wherein numerous scams such as Ponzi schemes are prevalent, but cryptocurrency exchanges, which elsewhere in the world have been targets of thefts by hacking.
According to Lim, the proposed legislation will have the SC and the Bank Negara Malaysia, the country’s central bank, forming part of a committee headed by the Finance Ministry.
Already, the government has budgeted a Co-Investment Fund for MYR50 million ($11.9 million) involving equity crowdfunding and peer-to-peer financing, which appear compatible with blockchain and cryptocurrency firms. The fund will have the government matching one-fourth of private investors’ contributions.
The SC has long been considering a regulatory framework that would adequately guide growth of the local industry. Late last year, the drafting of rules was being discussed. Shortly before this, some officials had seemed less inclined to even allow blockchain businesses in the country, suggesting an outright ban.
Last September, the government formed a task force, the Malaysian Industry-Government Group for High Technology (MIGHT), to look into adopting blockchain for the country’s major industries, namely renewable energy, palm oil, and Islamic finance.
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