BNM: RM75M TRANSACTIONS PER MONTH
Through 4 DCE operators, says deputy governor
AN average of RM75 million in transactions per month are being processed through four digital currency exchanges (DCEs) in Malaysia, Bank Negara Malaysia (BNM) said yesterday.
However, its deputy governor, Abdul Rasheed Ghaffour, highlighted that the amount was marginal compared with market capitalisation of global digital currency, which currently stood at US$420 billion (RM1.7 trillion).
He named XBit Asia, Coinhako, Pink Exchange and Luno as the DCEs that offered active digital currency services in Malaysia.
Ghaffour, in emphasising that digital currencies were not legal tender in the country, said he would meet the four DCE operators next week.
He said BNM would make it compulsory for DCEs to report its activities to the central bank effective next month, under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).
The move will enable BNM to gather data and gain further understanding on digital currencies that will help it determine future directions. It will also prevent misuse of digital currencies for money-laundering and terrorism financing activities
“This 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,” Ghaffour said.
Advising investors to “exercise due care” in dealing with digital currencies, Ghaffour said being a non-face-to-face customer transaction, digital currencies posed difficulty for law enforcement to trace proceeds.
He said it also had other risks, such as hacking and price volatility and opacity, due to speculative trading in the secondary market.
He said transaction records and consumer funds that were stored exclusively online via digital platforms might be susceptible to cyberattacks.
He said the move, once begun, would require DCEs to report on a monthly basis to the central bank and failure to do so would result in a penalty under AMLA.
However, he said BNM had no intention to ban digital currencies, as such a move would kill innovation and creativity.
When asked about Bitcoin, a form of digital currency, Ghaffour said it had a similar characteristic to a price bubble.
“If you look at the price, it is clear it is like a bubble. What it was when it was issued and what the price is today.
“If you look at any other investments, I do not think you will get much high returns. Everything that has high returns has a high risk. I would not disagree with that (Bitcoin in a bubble).”