One of the main appeals of using Bitcoin is that it is easy to use in an anonymous manner. If you want to purchase something online without having your credit card information put at risk, Bitcoin is perhaps the best method of doing so right now. This anonymous feature is also one of the biggest issues that governments face right now, though. This is especially true in Middle Eastern, African, and Asian countries where terrorism and crime can occur at elevated levels.
Malaysia is taking big steps in leading this fight. Their central bank recently instituted regulations to help reduce the likelihood of Bitcoin and other cryptocurrencies can be used in money laundering. Under the new model, any institution that converts a cryptocurrency into conventional currency will be deemed a reporting institution, and they must supply the Bank Negara Malaysia (Malaysia’s central bank) with information on the transactions. If suspicious transactions are found, the reporting institutions are legally required to report it.
It’s likely that if Malaysia is taking this measure, many others will soon follow soon. Malaysia has been a leader in this region when it comes to financial reform and regulation, and there’s a strong chance that other countries will begin to follow suit in the future. However, there’s not a timetable in place for when these new regulations will begin to be enforced. It was estimated that this would begin in the middle of 2018, but as of yet this prediction is not founded on official data. It was revealed, though, that the plan has been in the works for over a year, indicating that this is a matter of high importance to the Malaysian government.
Some cryptocurrency users have expressed their opinions that this type of a law will be detrimental to the growth of Bitcoin and other currencies in this region. The likelihood of this hurting the growth of cryptocurrencies is very slim. Cryptocurrencies are catching on in countries like Malaysia for more legitimate reasons than criminal ones. While this might deter a few people from using Bitcoin in this area, it will do far more good than bad, if the laws are upheld and monitored correctly.
Cryptocurrencies provide a universal currency in a region of the world where traditional currencies might otherwise be the victim of instability, inflation, stagflation, or might otherwise not have the support needed to help individuals within the country. Bitcoin, Ethereum, or any other crypto currency provide a solution to this, especially if they are used in a more legitimate manner. In other words, these currencies provide a more stable sort of wealth than these citizens might otherwise be able to experience in other situations. Adding to the positive side of the reputation of cryptocurrencies is a good thing, and Malaysia’s measures should be commended for that. Whether they will be successful or not remains to be seen, but this is a step in the right direction.
Remember, that this measure is not being put in place in order to tax or limit the usage of cryptocurrencies, but rather to try and prevent acts of terrorism and other criminal activities. The goal is that if suspicious activities are identified, the government can more closely monitor where and how transactions are being made in order to try and save lives and prevent crimes from occurring. If done right, this could be a very useful model for helping people to live a higher quality of life, even. Cryptocurrencies hail themselves as providing more economic freedom to all individuals, and this measure could certainly provide that benefit if handled in a proper manner.