Call to clas­sify cryp­tocur­ren­cies

> Bank Ne­gara Malaysia, Se­cu­ri­ties Com­mis­sion urged to work to­gether to pro­vide more clar­ity to the mar­ket

The Sun (Malaysia) - - SUNBIZ - BY LEE WENG KHUEN

KUALA LUMPUR: Bank Ne­gara Malaysia (BNM) and the Se­cu­ri­ties Com­mis­sion Malaysia (SC) should work to­gether to de­fine and clas­sify to­kens and cry­tocur­ren­cies to pro­vide more clar­ity to the mar­ket, ac­cord­ing to the Malaysian Blockchain Reg­u­la­tory Re­port.

It said the un­cer­tainty is un­favourable to the in­vestors, con­sumers and busi­nesses amid grow­ing blockchain tech­nol­ogy.

“While it is true that in the fi­nan­cial in­dus­try to­kens and cryp­tocur­ren­cies can be clas­si­fied ei­ther as an as­set, se­cu­rity or cur­rency, if the two reg­u­lat­ing bod­ies do not work in tan­dem there will be a lot of un­cer­tainty in the in­dus­try as to how to deal with digital cur­ren­cies and to­kens,” the re­port noted.

In Fe­bru­ary, BNM is­sued a pol­icy doc­u­ment on digital cur­ren­cies, but the SC has not de­fined or clas­si­fied the to­kens.

Cur­rently, BNM does not reg­u­late cryp­tocur­ren­cies as they are not le­gal ten­der.

The re­search re­port, which was launched yes­ter­day, was con­ducted by the Fac­ulty of Law of the Univer­sity of Malaya (UM) and Quanta RegTech Cap­i­tal plc (QRC).

It also high­lighted that there is a need to clar­ify tax treat­ment of digital cur­rency trans­ac­tions and their ex­changes.

“While the term ‘digital cur­rency’ has been de­fined in the pol­icy doc­u­ment on digital cur­ren­cies with re­gards to digital cur­rency ex­changes. The ques­tion arises as to whether that def­i­ni­tion of digital cur­rency is suf­fi­cient for it to be re­garded as ‘cur­rency’ un­der the In­come Tax Act 1967.”

Ear­lier, the In­land Rev­enue Board’s reg­u­la­tions and treaty di­vi­sion di­rec­tor, Mo­hamad Fauzi Saat, said the agency was still in the midst of study­ing the cryp­tocur­rency mar­ket and no time­line has been set for the re­lease of the guide­lines.

Project di­rec­tor for the reg­u­la­tory re­port Nur Husna Zakaria said at a press con­fer­ence yes­ter­day that she is pos­i­tive on blockchain de­vel­op­ment in Malaysia though reg­u­la­tion has not been put in place.

“None of the reg­u­la­tors in Malaysia has banned any trans­ac­tion re­lated to blockchain ap­pli­ca­tion, so it’s promis­ing it­self be­cause some reg­u­la­tors in other ju­ris­dic­tions have taken that step.”

She is hop­ing that the reg­u­la­tors could work hand-in-hand with the blockchain com­mu­nity, es­pe­cially the in­dus­try play­ers, as it is a new tech­nol­ogy with com­plex­ity.

“With that, what­ever reg­u­la­tion put in place will be com­pre­hen­sive and en­sure the vi­a­bil­ity of any ac­tiv­i­ties.”

Mean­while, QRC group founder and CEO Adam Vaziri said reg­u­la­tors need to clar­ify how cryp­tocur­ren­cies should be taxed, be it in the form of in­come tax and cap­i­tal gain. There must be an of­fi­cial pol­icy on the tax is­sue,” he added.

QRC is a ven­ture cap­i­tal that in­vests ex­clu­sively in blockchain RegTech.

From left (front): Univer­sity of Malaya (Dean of Fac­ulty of Law) Dr Jo­han Sham­sud­din Sabarud­din, QRC founder Enomoto, Univer­sity of Malaya vice-chan­cel­lor Datuk Dr Ab­dul Rahim Hashim and Vaziri at the Malaysian Blockchain Reg­u­la­tory Re­port launch...

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