The Securities Commission of Malaysia (SCM) has introduced new guidelines to protect a range of businesses who deal with digital currencies
The future of the gambling industry will see digital currencies play a major role and Malaysia is preparing for this. New guidelines for digital assets were published by the Securities Commission of Malaysia (SCM), updating their past guidelines.
The newly revised guidelines will protect a range of businesses that deal with digital currencies. These businesses will include custodian services and Initial Exchange Offerings (IEOS). These guidelines are designed to promote “responsible innovation in the digital asset space, while at the same time managing emerging risks and safeguarding the interests of issuers and investors,” as stated by the SCM.
The previous protocols, proposed by the regulator, established a number of rules for fundraising through digital assets. However, the new guidelines will add more protection to customers and businesses they work with as it will require organisations to follow a number of clear and sensible rules. The guidelines will require IEO platforms to perform due diligence processes on issuers, assess suitability for meeting local compliance and apply anti-money laundering assessments, including terrorist financing provisions.
Businesses have the choice to act as an IEO or custodian and applications for licenses are already open. Custodians have similar requirements to IEOs but not the same.
Having said that, Malaysia has not declared digital currencies as a legal tender. “Digital currencies and digital tokens are not recognized as a legal tender nor as a form of payment instrument that is regulated by Bank Negara Malaysia.”
Furthermore, not all digital assets need to be utilised as currencies. Blockchain, such as Bitcoin SV, can be used as a data transfer network and business dealings like transactions. Gambling operators will be able to list their wagers to the blockchain whilst pay out their players with stablecoin tokens.
Interestingly enough, the Philippines regulator PAGCOR, suggests that Malaysia will be the new online gaming hub as the Philippines are experiencing a mass exodus of businesses and operators due to high taxation rates and the lasting effects of the pandemic. Introducing such guidelines, in relation to digital currencies, will help Malaysia reach their potential and become a mainstay in the online gambling scene in the future.
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