By AFIQ AZIZ / Pic By ISMAIL CHE RUS
Malaysia must provide a relaxed, yet effective regulatory environment for blockchain technology to flourish, a Universiti Malaya (UM) report stated.
The 242-page report by the university noted that the adoption of blockchain technology is crucial to the country’s economic and technological development, and the legal issues concerned must be further explored and addressed.
“Establishing such an environment requires concerted efforts by all stakeholders, and going forward there must be active collaboration among the stakeholders in this area.
“It is hoped that this report can be the starting point to synthesise some of the legal viewpoints into collective practical solutions which will benefit Malaysia,” the report, titled “Blockchain Regulatory Research Report”, stated.
The report was collaboratively produced by UM’s Law Faculty and blockchain developer, Quanta RegTech Capital plc (QRC), and launched by the Ministry of Energy, Technology, Science, Climate Change and Environment deputy secretary general Dr Ramzah Dambul.
“Just like any other technology, blockchain itself is neutral. It can be used for good and evil. Cryptocurrencies provide a new avenue for criminals to transfer their illgotten proceeds.
“Initial coin offerings, or ICOs, can be a new guise for Ponzi schemes. This is because blockchain is flourishing in an unregulated space right now — akin to a digital Wi ld West,” his speech, read by UM Law Faculty dean Dr Johan Shamsuddin Sabaruddin in Kuala Lumpur yesterday, stated.
Last March, the ministry set up a task force to develop guidelines for the application of blockchain technology in Malaysia.
Johan said UM is willing to work with any stakeholder on the regulation of blockchain technology.
Blockchain is a digital ledger where transact ions are recorded chronologically and publicly, and could be effectively used to prevent fraud.
It made its public debut when Satoshi Nakamoto, a fictitious character, published a paper called “Bitcoin: A Peer-to-Peer Electronic System”, in 2008. Since then, the most common misconception among the general public is that.
Ramzah said although the technology is mostly used in the digital currency space to process transactions online, blockchain has many other useful applications.
He said applications inside the blockchain, such as “smart contract”, can help eliminate human error in managing commercial transactions.
The technology could help the industry in keeping public records, such as land registries, to prevent fraud, Hamzah explained.