No matter which way you look at it, regulation plays a large part in dictating how a nation decides to adopt new and disruptive technologies. Worldwide, we are seeing differing approaches between nations on how they are looking to implement regulatory frameworks for Blockchain. In this article, I explore the regulatory climate of Blockchain within various regions of Asia, followed by a discussion of where Malaysia is currently at by comparison.
Blockchain Regulation In China
In China, regulatory attitudes are comparatively strict. 2017 saw a number of Blockchain companies pop up, and at its peak — the nation accounted for roughly three-quarters of the world’s bitcoin mining operations. The government has since clamped down on the use of cryptocurrencies, banning exchanges and the public participation in ICOs. Arguably, China still lacks a standardised regulatory framework that can allow the underlying Blockchain technology to fully flourish.
Blockchain Regulation In Southeast Asia
In Southeast Asia, our regional neighbours like Thailand have a more relaxed approach to regulation. Registered cryptocurrency companies in Thailand may now apply for licenses via the SEC Thailand, though are subject to a number of conditions. Philippines have a similar policy, though the number of licenses available to be issued are capped to 25.
Singapore has been arguably one of the most lenient of all the Southeast Asian countries. In recent news, the Monetary Authority of Singapore (MAS) are now even considering reducing capital requirements for blockchain start-ups and simpler requirements for regulations, which would make the nation even more attractive to new Blockchain companies.
Blockchain Regulation In Malaysia
This year, Bank Negara Malaysia (BNM) issued a directive to regulate the use of digital currencies, to ensure that effective measures are in place against money laundering and terrorism financing risks.
BNM hopes to put in place a regulatory framework around Blockchain that can drive its adoption, while mitigating the risks for users. While there is a long road ahead for Blockchain regulation in Malaysia, it is evident that the central bank is keeping an open mind on this disruptive new technology.
Blockchain Adoption: Where Is Malaysia Headed Next?
Malaysian banks are taking proactive steps to encourage Blockchain development in Malaysia. BNM announced that 9 of them are currently working together to develop blockchain applications to assist with trade finance.
Blockchain use-cases stretch far beyond just payment systems, and the tracking of Halal foods is a unique one that South Korea’s ‘IncuBlock’ and the Malaysian government committee hope to strive towards. Together, they have signed a Memorandum of Understanding (MOU) to make blockchain technology permissible under Sharia Law.
“Malaysia is a unique country in the sense that although we are relatively slow to adopt, we embrace new technologies without much friction”- Lon Wong (ProximaX)
A coalition of blockchain enthusiasts and fintech firms are joining forces to improve literacy in blockchain tech in an effort to drive adoption by persuading more startups to enter the space in Malaysia. Eight groups have since signed the MOU.
As part of NEM.io Foundation’s expansion into Malaysia, they have invested 40 Million USD to develop Malaysia’s very own Blockchain Centre in KL. The facility includes an accelerator, incubator and feature-packed co-working space.
The number of private Blockchain firms and start-ups are on the rise, and it is of little surprise given the government’s fairly relaxed approach in regards to regulation. It will be interesting to see how Malaysia as a nation will continue to further the development of this exciting new technology.
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Sean’s unequivocal passion for all things blockchain blossomed in late 2016. Starting off his journey as a daytrader, he found himself quickly immersed in the projects and their visions of a decentralised future economy. He is Blocfest’s chief writer/editor, and publisher of Channel 3.0, a blog focusing on blockchain-powered digital media, content and advertising platforms.