Allow cryptocurrency usage, ban trading

KUCHING: Regulators should allow the usage of cryptocurrency in Malaysia rather than ban it, as the electronic money can serve as an universal currency while help eliminate foreign exchange cost, suggests chief executive officer Raja Teh Maimunah Raja Abdul Aziz.
Believing that cryptocurrency would evolve into another form of medium of exchange, she projected that the current fiat currency could turn into an alternative currency in the future.
"The currency (cryptocurrency) in itself is actually a brilliant idea. For a start, I hope regulators will allow its usage but consider banning the trading of this currency or else it would be used as a speculative tool.
"In the context of Islamic finance, speculation is 'haram'. So, you have to remove that element of speculation and use it purely as a means of exchange," she told reporters on the sidelines of the 13th World Islamic Economic Forum (WIEF) here today.
She explained that cryptocurrency was a non-commodity instrument which cannot be traded as it was not permissible in Islam.
"Its just an electronic currency that doesn't belong to anybody while fiat currency is sovereign based where it has its own jurisdiction regulators. I support cryptocurrency because it is a global trade," Raja Teh Maimunah added.
Meanwhile, Datuk Dr Mohd Azmi Omar, President and Chief Executive Officer of the International Centre for Education in Islamic Finance suggested that cryptocurrency be looked at per say rather than arguing and viewing it as a trading activity.
He said arguments arose over syariah compliant stocks in the stock exchange back in the mid-80s, where Islamic stocks were initially unaccepted due to high speculative activities.
"If you control speculative activities, then everything will be okay. In some countries, cryptocurrency trading is allowed with some regulation.
"The question is, how can you tell if it is a real business or somebody who has created a vicious company to get money. Ultimately, there must be some form of regulation," he added.
Mohd Azmi urged Bank Negara Malaysia to first put cryptocurrency into a sandbox and then monitor it before formulating any regulation.
Earlier today, Governor Muhammad Ibrahim said work on a regulatory structure for cryptocurrency has begun and starting next year, any person converting cryptocurrency into fiat money would be designated as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.
He said the move was aimed at preventing the abuse of the system for criminal and unlawful activities, and ensuring the stability and integrity of the financial system. — Bernama