Malaysia PM Chats to Changpeng Zhao About Introducing Crypto Legislation

Malaysia is considering developing a digital finance policy that could formally recognize cryptocurrency and blockchain technology.

According to local media, Prime Minister Datuk Seri Anwar Ibrahim said he engaged in discussions with the Abu Dhabi government and Binance to explore the initiative.

"We have talked about digital transformation, data centres and artificial intelligence (AI). We now face demands which require us to think about making significant changes," Anwar said.

"I had lengthy discussions with the Abu Dhabi leadership and Changpeng Zhao (CZ), co-founder of the world's largest cryptocurrency platform Binance."

"I proposed several months ago how our agencies, including security, treasury and Bank Negara study how Malaysia can explore this so we aren't left behind. Ensuring that is regulated could safeguard the people's interests and prevent leakages," he continued.

Anwar highlighted the importance of regulation and modernization, drawing parallels to the UAE's leadership in this space.

"They (UAE leaders) feel that they can forge a close cooperation with Malaysia on this issue. We need to discuss this in detail, leave behind the old business model and give meaning to this digital finance policy," he said.

"We have discussed at length about fintech. But when something new comes about, we get agitated. I hope we can be more open to this. I am leaning towards not just approving but also expediting this."

Anwar also expressed a sense of urgency, advocating for swift action, and that Malaysia would rely on experiences from Binance and the UAE.

"This is an evolution which happens quickly and requires us to be equally fast. We feel that Malaysia should not be left behind while mired in an old financial system," he said.

Binance, the world’s largest cryptocurrency exchange by trading volume, says that it now has over 250 million registered users, marking a 47% increase from 2023, according to its 2024 year-end report.

CZ exited Binance in 2023 and served a four-month prison stint following a legal settlement with the U.S. Department of Justice that included a $4.3 billion dollar fine. While he has distanced himself from the day-to-day operations of the exchange he built in 2017, CZ still made an appearance in Dubai at Binance Blockchain Week Dubai 2024.

When asked about the timeline for implementing this policy, Anwar acknowledged that comprehensive studies would be necessary, involving the Treasury, the Securities Commission, and Bank Negara Malaysia. "As with all new ideas raised, there will be some concerns. We have to train our personnel, develop competency, and get the players to participate."

Last month, Malaysia’s Securities Commission (SC) launched enforcement measures against crypto exchange Bybit and its CEO, Ben Zhou, for operating without the necessary registration.

The SC ordered Bybit to halt all operations within Malaysia, including suspending its website, mobile applications, and other digital platforms. The exchange has been given 14 business days from December 11 to comply with these directives. Additionally, Bybit must cease all advertising targeted at Malaysian investors and shut down its Malaysia-specific Telegram support group.

In October, the SC announced a series of initiatives aimed at accelerating innovation in the country's capital market, with a particular focus on security tokenization.

The initiatives include the establishment of a regulatory sandbox to provide a controlled environment for fintech firms to experiment with new digital asset products and services, the development of a more streamlined regulatory framework for security token offerings (STOs), and a collaboration with Khazanah Nasional, Malaysia's sovereign wealth fund, to explore the issuance of tokenized bonds.