Malaysia’s central bank, Bank Negara, is set to release a “concept paper,” calling for the public to decide the fate of cryptocurrencies in the country, according to a recent report. Bank Negara governor Muhammad Ibrahim is said to have assured the bank will neither ban nor recognize cryptocurrency, and that the paper will be finalized in February.
Malaysia Lets Public Decide
At the 40th anniversary dinner of Harvard Business School Alumni Club of Malaysia, Bank Negara governor Muhammad Ibrahim said, “Basically, we will let the cryptocurrency promoters including bitcoin, ethereum and ripple to be more transparent, the methods to be more transparent and people behind the scene are to be more transparent too. By doing so, the public can decide on its own if they want to invest in cryptocurrencies.’’
Malaysia in recent years has been an economic tiger, its economy growing faster than more powerful regional cousins South Korea, and even outpacing France and Australia. Its government is unusually paternalistic with regard to the economy, however, though less so as it has developed. Politically it occupies an odd space in Southeast Asia as a federal constitutional elective monarchy. Something akin to the Westminster system, the king is chosen in rotation by hereditary families, and he acts as ceremonial head of state, appointing upper parliament house members and ministers.
Mr. Ibrahim’s comments follow Finance Minister II Johari Abdul Ghani who explained the country wouldn’t ban cryptocurrency completely so as to avoid curbing “creativity and innovation in [the] financial sector,” according to a report. This is at least the second time the government has reverted to public opinion with regard to cryptocurrencies. Back in December of last year, the central bank put together crypto regulatory guidelines for both citizens and businesses in the country.
While Mr. Ibrahim’s latest comments might seem a victory for freer market forces, a hint of the old paternalism also pervaded the report. He waxed on about exactly how much debt citizens should have relative to housing prices, broadening to the regulator’s role in an economy. He mentioned understanding the corporate sector is always looking for a relaxation of rules, but that the government’s job was to preserve “stability.”
“When necessary, policy makers should be bold in drafting policies especially when the operation in financial and economic system face pressure or the yardsticks are no longer effective,” he reminded.
For crypto enthusiasts, the hope is Bank Negara really does listen to its citizens, as the country continues to have a vibrant scene of cryptocurrency exchanges in the traditional sense along with peer-to-peer options.
Do you think the central bank will keep its word and listen to the will of the people? Let us know in the comments section below.
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