KUALA LUMPUR, Malaysia - Bank Negara, the central bank of Malaysia will release a concept paper soon for public to decide on the fate of cryptocurrencies. It will not recognise nor ban cryptocurrencies.
A concept paper on cryptocurrency will be finalised this month for public to decide on the future of such currency, says Bank Negara governor Muhammad Ibrahim.
He stressed that the central bank would not recognise cryptocurrency as fiat money. Bank Negara would also not ban cryptocurrency either but leave it to the market to decide on the fate of cryptocurrency. The key point is one must know what does it have internally.
“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,’’ he said.
Muhammad said this during a question and answer session at the 40th anniversary dinner of Harvard Business School Alumni Club of Malaysia.
Unlike other countries which decided to ban on cryptocurrency, Malaysia adopted a slightly different approach.
Finance Minister II Johari Abdul Ghani had said Malaysia would not completely ban transaction on cryptocurrency as such move would “curb creativity and innovation in financial sector.
As of September 2017, there are more than 1,100 types of cryptocurrency.
On the other hand, Muhammad said according to data, many aged between 35 and 45 are bankrupt for owing credit cards.
While increase in cost of living is true, people should also examine their lifestyle.
He said currently 40 per cent of lower income group (income lower than RM3,855) still can’t afford to buy affordable homes.
“If your salary is about RM3,000 (USD789.47) , you can only afford to buy a RM180,000 (USD 47,368) property. But where can you find this type of property?”
He added that the high-end condominiums are oversupplied in the market but their price is unaffordable.
“We need to rectify this through market mechanism,’’ he said.
Facing an environment with changes taking place fast due to big data and information science and technology, Muhammad said policy makers should remain alert and do not live in their own world.
He said when facing changes, the scope for policy makers to take into consideration is even larger.
He said corporate sector hope the government would relax policy for them to look for new opportunities. But when risks are involved, the authorities are responsible to revise unfriendly policy in order to maintain the stability of market and its growth potential.
He also said that policy makers should be protective and emphasis on independence execution.
“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 said the policies must be transparent with good communication so that the public would understand the policies for them to be effective.