Cryptocurrency, property crowdfunding frameworks ready by 1Q19

Finance minister says the MoF will act as the coordinating body streamlining the cryptocurrency-related framework

By NG MIN SHEN / Pic By ISMAIL CHE RUS

TWO new frameworks to regulate cryptocurrency and property crowdfunding are expected to be ready by early next year, in line with global and domestic trends of technology application in the financial sector.

Finance Minister Lim Guan Eng said the Ministry of Finance (MoF) will act as the coordinating body streamlining the cryptocurrency-related framework, which will be developed by the Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM).

“The SC has given me an update that regulations for digital assets or cryptocurrency exchanges and initial coin offerings (ICOs) will come into force by the first quarter of 2019 (1Q19), as part of the SC’s efforts to facilitate alternative fundraising avenues and new investment asset classes.

“While some parties might still be sceptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors,” he said in his keynote address at the SC’s ScxSC Fintech Conference 2018 in Kuala Lumpur yesterday.

According to Lim, both the central bank and SC will be under the auspices of the MoF when it comes to formulating the frameworks.

“Interested parties must work within the frameworks set up by BNM and the SC. The MoF will lead the committee that comprises BNM, the SC and MoF itself.

“So, for those who are interested, please liaise with this coordinating body headed by the MoF and ensure that you are in full compliance. While we want to encourage, we also want to comply with the law to ensure that the investors know what they are getting into,” he said.

This ruling also applies to the proposed Harapan Coin cryptocurrency, Lim added when speaking to reporters after delivering his keynote speech.

“(It) definitely applies to everyone. I’ve actually communicated with the minister who made the announcement,” he said in reference to Federal Territories Minister Khalid Abdul Samad.

Khalid, who co-founded Harapan Coin, recently said he would continue to pursue the Harapan Coin, which has been dubbed as the world’s first political fundraising platform utilising cryptocurrency and blockchain technology.

Khalid had said the paperwork on the platform — which can also be used to make payments for licences, summonses and others — have been prepared and would soon be presented to BNM and Prime Minister Tun Dr Mahathir Mohamad.

“He (Khalid) has agreed not to make any more statements relating to that. He said he didn’t realise that this would be so widely reported — it was just a remark,” Lim added.

The government is also exploring new technologyenabled and innovative mechanisms to further the national agenda, the first of which includes property crowdfunding platforms as an alternative source of financing for firsttime homebuyers.

“I know everyone is waiting with bated breath to observe whether these models will be successful. As previously announced, we are on track to have regulations in place by early 2019,” Lim said.

Meanwhile, SC chairman Datuk Syed Zaid Albar said the regulator has already prepared a first draft of the property crowdfunding guidelines and will now seek feedback on the ruling via engagements with the industry.

“We are in the process of amending all the guidelines relating to this (framework), to ensure that we can accommodate this concept. The first cut is ready and with this draft, we will be doing industry consultations in the coming months to get everybody’s views.

“Our primary concern is to ensure that investors, the housebuyers, are protected. From there, based on the feedback and consultation with MoF and everyone, we hope to release the regulation by early next year. Then, eligible applicants can apply and we will assess them fairly and transparently,” he said.

Earlier this month, the SC said the commission will put in place a regulatory framework to regulate digital asset exchanges and ICOs to facilitate a “fair and orderly development” of the market, with the regulations expected to take effect in 1Q19.

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