Malaysian PM discusses potential crypto regulatory framework with Binance founder CZ and UAE officials

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Malaysia’s Prime Minister Datuk Seri Anwar Ibrahim recently met with Binance founder Changpeng Zhao and UAE officials to discuss potential crypto regulatory frameworks, the New Straits Times reported Tuesday.

The discussions, which took place during Anwar’s three-day official visit to Abu Dhabi, centered on establishing policies that could recognize the crypto industry and modernize Malaysia’s financial system.

“I had lengthy discussions with the Abu Dhabi leadership and Changpeng Zhao, co-founder of the world’s largest cryptocurrency platform, Binance,” Anwar said, adding that he has urged the central bank and Treasury to study digital finance to avoid being left behind and protect the public interest.

“This is an evolution which happens quickly and requires us to be equally fast. We feel that Malaysia should not be left behind while mired in an old financial system,” the PM noted.

The PM stated that the initiative would mark “a radical departure from the old ways.” UAE policymakers expressed willingness to collaborate with Malaysia in developing its crypto regulatory approach.

“We need to discuss this in detail, leave behind the old business model and give meaning to this digital finance policy,” Anwar stated.

Malaysian authorities, including the Treasury, Securities Commission, and Bank Negara Malaysia will conduct thorough studies before any policy implementation, according to the PM. He also noted potential concerns and the need to train personnel and develop competency in this area.

State of digital assets in Malaysia

In Malaysia, the ringgit remains the sole legal tender. While not recognized as legal tender, digital assets are finding a place within the existing financial framework. They’re categorized as securities under the Capital Markets and Services Order, bringing them under the purview of Malaysian financial regulations.

Oversight of cryptocurrencies is shared between Bank Negara Malaysia and the Securities Commission. The central bank handles general crypto matters, while the securities regulator regulates digital currencies classified as securities.

Last June, the Inland Revenue Board launched “Ops Token” to address tax evasion related to crypto trading, conducting raids across 10 locations in the Klang Valley. The IRB reported uncovering crypto trading data on devices, leading to the identification of substantial tax revenue leakage.

Beyond tax concerns, authorities have been combating illegal cryptocurrency mining operations that rely on stolen electricity. Estimates from the Deputy Energy Minister put the cost of this illegal activity at roughly $723 million in stolen electricity between 2018 and 2023.

Despite efforts to regulate crypto assets, experts note that Malaysia’s legal framework still lacks transparency and consistency. There are calls for more comprehensive legislation tailored specifically to digital assets.

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