Malaysia adds to digital currency guidelines
Digital currencies will likely play a large role in the future of the gambling industry, and Malaysia, if it will have any role in that, is getting ready. The Securities Commission of Malaysia (SCM) has published new guidelines for digital assets, revising their previous guidance effectively as of October 28.
The new guidelines cover a range of businesses dealing with digital currencies, including markets, custodian services and Initial Exchange Offerings (IEOS.) The SCM noted the new guidelines were designed to promote “responsible innovation in the digital asset space, while at the same time managing emerging risks and safeguarding the interests of issuers and investors.”
The initial guidelines from the regulator established rules for fundraising through digital assets. They go into effect at the end of 2020, but these new guidelines add much more clarity for the broad scope of digital asset businesses, and require them to follow sensible rules to protect customers and other businesses they partner with.
Notably, IEO platforms will now be required to perform due diligence processes on issuers, assess suitability for meeting local compliance, and apply anti-money laundering assessments, as well as terrorist financing provisions. Custodian services will have to meet similar requirements.
Businesses can already start applying for licenses with the SCM, to act as either a custodian or IEO.
But to be clear, Malaysia has not declared digital currencies as legal tender. “Digital currencies and digital tokens are not recognized as a legal tender nor as a form of payment instrument that is regulated by Bank Negara Malaysia.”
Not all digital assets have to be used as currencies though. As Bitcoin SV has proven, the blockchain can be used for both transactions and as a data transfer network. Gambling businesses could record their wagers to the blockchain while also paying out their players with stablecoin tokens, making the value of BSV only a side thought to the business being done on chain for fractions of a penny.
This is an important step if Malaysia is to be a future player in the online gambling scene. Philippines regulator Philippine Amusement and Gaming Corporation (PAGCOR) has suggested Malaysia might be a new hub for online gambling as it’s own country sees an exodus of businesses, caused by high taxation rates and the pandemic.