Bank Negara issues anti-money laundering, terrorism financing policy for digital currencies

Bank Negara reminded the public that digital currencies are not legal tender in Malaysia. — Picture by Yusof Mat Isa
Bank Negara reminded the public that digital currencies are not legal tender in Malaysia. — Picture by Yusof Mat Isa

KUALA LUMPUR, Feb 27 — Bank Negara Malaysia (BNM) has issued the Anti-Money Laundering and Counter Financing of Terrorism Policy (AML/CFT) for Digital Currencies to ensure that effective measures are in place to combat such activities.

“The policy aims to ensure that effective measures are in place against money laundering and terrorism financing risks associated with the use of digital currencies and to increase the transparency of digital currency activities in Malaysia,” said BNM.

The Central Bank said the policy has taken into account feedback received during the public consultation period on the exposure draft released on Dec 14, 2017.

BNM also said it received feedback from representatives of existing digital currency exchangers, industry associations, law firms, financial institutions, academia as well as interested individuals.

“Feedback received from respondents mainly focused on the obligations imposed on digital currency exchangers, including businesses providing intermediary services involving digital currencies. “

It reiterated that the invocation of reporting obligations on digital currency exchange business does not in any way connote the authorisation, licensing, endorsement or validation by BNM of any entities involved in the provision of digital currency exchange services.

Where relevant, these matters have been further elaborated in the policy document.

The Central Bank also reminded the public that digital currencies are not legal tender in Malaysia.

“Accordingly, digital currency businesses are not covered by prudential and market conduct standards or arrangements that are applicable to financial institutions regulated by BNM.

“Members of the public are advised to carefully evaluate the risks associated with dealings in digital currencies. Any persons carrying on activities involving digital currencies should refer to the details within the policy to determine its applicability and comply accordingly,” it said.

Persons covered under the policy as reporting institutions are expected to comply with the provisions of the Companies Act 2016, including the requirement to be incorporated or registered.

Members of the public may access the policy document as well as a list of common questions and feedback on the BNM’s website at http://www.bnm.gov.my/. — Bernama

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