Malaysia, Singapore offer unique approaches to cryptocurrency supervision: experts

Malaysia, Singapore offer unique approaches to cryptocurrency supervision: experts, Illustrative photo (Photo: Octa)

Kuala Lumpur – The growth of financial technologies, including blockchains and cryptocurrencies, depends on how well the legal system can adapt. Globally, as the legal status of cryptocurrencies remains ambiguous, Malaysia and Singapore offer unique approaches to cryptocurrency supervision.

According to experts of Octa - a broker with globally recognised licences, in 2023, Malaysia ranked among the top 30 countries for crypto adoption based on transaction volume, with its peer-to-peer (P2P) exchange trade volume placing it 40th globally.

As for Singapore, it is currently a regional leader in cryptocurrency adoption, with 49 per cent of its population aware of cryptocurrencies and 12 per cent actively owning them. In 2023, the nation attracted 627 million USD in crypto funding, supported by a skilled workforce and favourable fiscal policies.

Malaysia regulates digital assets through the Capital Markets & Services (Digital Currency and Digital Token) Order 2019. While cryptocurrencies are classified as securities, they are not recognised as legal tender by Bank Negara Malaysia (BNM) - the country's central bank.

Companies involved with digital currencies or tokens are required to register with the local authority. The regulations also enable companies to raise funds through token issuance but require due diligence and compliance with anti-money laundering (AML) and anti-terrorism financing policies.

Despite these regulations, Malaysia’s legal framework still lacks transparency and consistency, posing risks for businesses trying to navigate the complex landscape. As crypto popularity rises, new policies may emerge, said Kar Yong Ang, the Octa broker's financial market analyst.

Meanwhile, Singapore already boasts a robust regulatory framework that enhances its status as a global financial centre. The Payment Services Act (PSA), introduced in 2019, serves as the primary legal framework governing digital payment tokens (DPTs). It mandates licenses for activities like operating exchanges and providing digital wallets.

Additionally, the Securities and Futures Act (SFA) regulates DPTs that resemble capital market products, while the Commodity Trading Act applies to asset-backed DPTs, treating them as commodities.

This comprehensive regulatory approach ensures a structured environment for cryptocurrency activities, fostering innovation while maintaining security.

Singapore’s strong telecommunications infrastructure, highly skilled workforce, and favourable fiscal policies, such as the absence of capital gains tax, make it an attractive hub for digital innovation. A thriving community of startups, accelerators, and incubators foster innovation in the crypto sector.

According to Statista, the country’s crypto market is projected to grow by 8.79 per cent annually from 2024 to 2028, reaching 479.5 million USD in value by 2028.

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