By ALIFAH ZAINUDDIN & DASHVEENJIT KAUR / Pic By TMR

THE Securities Commission Malaysia (SC) is expected to finalise the regulatory requirements for the issuance of initial coin offerings (ICOs) by the second half of 2019 (2H19).

Deputy Finance Minister Datuk Amiruddin Hamzah (picture) said a monitoring framework on the trading of digital assets through ICO has been drafted by the SC, who is now gathering feedback from relevant stakeholders.

The government had earlier expected the regulation on ICO and digital assets trade to be launched by end of first quarter this year (1Q19). It was announced after the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 came into force on Jan 15.

“The regulatory approach taken by Bank Negara Malaysia and SC is intended to spur innovation in the industry, while ensuring that risks on digital assets trading activities remain under control.

“To increase transparency and reduce the risk of money laundering and terrorism financing, regulations have been issued to introduce obligatory reporting and customer due diligence for the digital assets market,” Amiruddin told the Dewan Rakyat yesterday.

He was responding to a question by Fahmi Fadzil (PH-Lembah Pantai) on the government’s policy on e-wallet and digital cryptocurrency.

Earlier this year, the SC said it would set guidelines to regulate the offering and trading of digital assets. Those dealing in digital assets will be required to put in place anti-money laundering and counter-terrorism financing rules, cybersecurity and business continuity measures.

“The guidelines will establish criteria for determining fit and properness of issuers and exchange operators, as well as disclosure standards and best practices in price discovery, trading rules and client asset protection,” it said.

On the use of e-wallets, Amiruddin said a total of 25 million mobile payment transactions worth RM725.8 million have been recorded in 1Q19.

He said the government was moving towards a cashless society and pushing the move as it has proven to be safer than using cash. Amiruddin said the use of e-wallets would also make payments more efficient, as it was faster and safer.

“We want this to be the norm in the country where we no longer have to carry a physical wallet full of cash, but use an e-wallet for our future transactions instead,” he said.

Amiruddin said the central bank has so far approved 49 non-banking companies to provide digital money, of which 39 offered e-wallets, and 10 via cards and online accounts.