According to the latest announcement of the Bank Negara Malaysia, the Central bank at the helm of its countries financial market regulatory related matters, a stern warning barely three sentences long, aimed at cautioning of the dangers of Bitcoin due to its unregulated status in Malaysia, as noted by the Soverign state on January 3rd and updated yesterday on its website. (Earlier today, neighboring Vietnam, took a more positional stance against bitcoin, effectively banning Bitcoin ATM’s, as reported by Payment Magnates). The issued statement from the Bank Negara said, “Bitcoin is not recognized as legal tender in Malaysia. The Central Bank does not regulate the operations of Bitcoin. The public is therefore advised to be cautious of the risks associated with the usage of such digital currency.”
Often a regulator or even a compliance person at a firm that is not fully vetted with a products structure, purported benefits, as well as potential risks, will err on the side of caution by advising against it. This often happens because regulatory changes normally lag technology development with regards to new inventions and product offerings and therefore, unless a firm can amply defend its regulatory compliance with a new product, an otherwise difficult to decipher offering could get a cold reception (as has Bitcoin in Malaysia with this news from its Central bank).
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Although the Bank Negara statement specifically stated the legal tender status as the pivotal point, this could have been done solely to exercise its legal authority rather than chosen as a final definitive position that the bank is taken on the future of Bitcoin in its country.
That is, until the hereto undetermined fate of Bitcoin and digital currencies in general is debated in Malaysia by regulators, and policy makers, for now its tender status remains illegal – but not prohibited or banned as has occurred in other regions in Asia.