Thammasat University students interested in law, business, ASEAN studies, political science, economics, Australia, and related subjects may find it useful to participate in a free 8 November Zoom webinar on Cryptocurrency regulatory issues in Australia, Malaysia and Indonesia.
The event, on Wednesday, 8 November 2023 at noon Bangkok time, is presented by Monash Business School, Australia and Monash University Malaysia.
The TU Library collection includes several books about different aspects of cryptocurrency regulation.
Students are invited to register at this link:
https://monash.zoom.us/webinar/register/WN_SZUGmWceRMyAsYfdwxhsyw
The event announcement states:
What are the differing approaches of governments and regulators in Malaysia, Australia and Indonesia to this rapidly developing and often challenging landscape?
Among the issues being grappled with are the very nature of cryptocurrency, regulatory options, law enforcement and taxation.
An often overlooked aspect includes the environmental impact of carbon emissions produced by ‘mining’ for some cryptocurrencies such as Bitcoin.
Hear from Monash Malaysia’s Associate Professor Evgeny Guglyuvatyy and Dr Ridoan Karim and financial regulation expert Associate Professor Michael Duffy, from Monash Business School’s Business Law and Taxation Department. Also presenting is Yayan Riyanto, a Monash PhD candidate and Indonesian tax expert.
As TU students know, the legal status of cryptocurrencies varies from one jurisdiction to another, and is still undefined or changing in many of them.
In most countries, the use of cryptocurrency is not in itself illegal, but its status and usability as a means of payment or commodity varies, with differing regulatory implications.
Some states have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified cryptocurrencies differently.
In December 2013, the governor of the Reserve Bank of Australia (RBA) indicated in an interview about bitcoin legality stating, “There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies.”[194] Beginning in April 2018, Australian digital currency exchanges must register with the Australian Transaction Reports and Analysis Centre and implement “know your customer” policies to comply with new anti-money laundering legislation.
On 4 November 2013, Bank Negara Malaysia (BNM) met with local bitcoin proponents to learn more about the currency but did not comment at the time. BNM issued a statement on 6 January 2014 that bitcoin is not recognized as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage.
On 7 December 2017, Bank Indonesia, the country’s central bank, issued a regulation banning the use of cryptocurrencies including bitcoin as payment tools starting 1 January 2018. On 11 November 2021, Indonesian Ulema Council issued haram fatwa against use of cryptocurrencies as currency including Bitcoin, citing both Islamic laws and Indonesian banking and monetary regulations. The fatwa also forbids cryptocurrency trading and holding, except if those cryptocurrencies met the Islamic sil’ah standards of trade-able and own-able goods such as having physical form, having clear value, having known number, can be really owned, transferable, and not entirely speculative.
By passing of the Law on Financial Sector Development and Strengthening on 15 December 2022, all cryptocurrencies including the Bitcoin listed as “monitored financial technologies” that all related affairs related to the innovation, utilization, and other activities related to it will become the subject of Bank Indonesia and Financial Services Authority control and monitoring.
According to a document posted on the website of the Law Library of the Library of Congress in Washington, DC, Regulation of Cryptocurrency Around the World dated June 2018:
On January 13, 2018, Bank Indonesia (Indonesia’s central bank) released a statement that warns against buying, selling, or otherwise trading in virtual currencies. The statement includes the following: Bank Indonesia affirms that virtual currencies, including bitcoin, are not recognized as legitimate instrument of payment, therefore not allowed to be used for payment in Indonesia. This is in line with Act No. 7/2011 on The Currency, which states that currency shall be money of which issued by the Republic of Indonesia and every transaction that has the purpose of payment, or other obligations which need to be fulfilled with money, or other financial transactions conducted within the territory of the Republic of Indonesia, has to be fulfilled with Rupiah. The statement goes on to say that ownership of virtual currency is “highly risky,” “vulnerable to bubble risks,” and “susceptible to be used for money laundering and terrorism financing.” Bank Indonesia therefore considers that such currencies “can potentially impact financial system stability and cause financial harm to society.” It also refers to Bank Indonesia Regulation No. 18/40/PBI/2016 on Implementation of Payment Transaction Processing and Bank Indonesia Regulation No. 19/12/PBI/2017 on Implementation of Financial Technology in affirming that, as the payment system authority, the Bank forbids all payment system operators and financial technology operators in Indonesia from processing transactions using virtual currencies. This statement was supported by the Minister of Finance who, in a press conference on January 23, 2018, warned that virtual currencies are a high-risk and speculative investment and said that “[w]e will also continue to function as a government that conveys the view that it is not in accordance with the Law to be used as a means of transaction.” The Bank’s statement follows an earlier press release in 2014, in which it encouraged caution with respect to virtual currencies and stated that “[i]n view of the Act No. 7 Year 2012 [sic] concerning Currency and Act No. 23 Year 1999 which has been amended several times, the latest with Act No. 6 Year 2009, Bank Indonesia states that bitcoin and other virtual currency are not currency or legal payment instrument in Indonesia.”
The same document reports about Malaysia:
On January 2, 2014, Bank Negara Malaysia (Malaysia’s central bank) issued a statement saying that “[t]he Bitcoin is not recognised as legal tender in Malaysia. The Central Bank does not regulate the operations of Bitcoin. The public is therefore advised to be cautious of the risks associated with the usage of such digital currency.” On December 14, 2017, the Bank released, for the purposes of public consultation, a proposed policy “on the invocation of reporting obligations on digital currency exchange business as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).” According to the associated press release: [t]he proposed policy sets out the legal obligations, requirements and standards that digital currency exchangers, which will be defined under the First Schedule of the AMLA, must carry out as reporting institutions. This includes transparency obligations which are intended to provide relevant information for the public to better understand and evaluate risks associated with the use of digital currencies. Increased transparency will also serve to prevent the use of the digital currencies for criminal or unlawful activities. A digital currency exchanger must also declare its details to the Bank as a reporting institution. Failure to declare its details as reporting institutions or comply with the reporting obligations may subject the digital currency exchangers to the enforcement and noncompliance actions as provided under the AMLA as well as the potential termination or denial of use of financial services in Malaysia. The press release also affirms that digital currencies are not considered legal tender in Malaysia and digital currency businesses are not regulated by the Bank; the invocation of reporting obligations on digital currency exchange businesses does not connote any form of authorization or endorsement by the Bank. The statement goes on to again advise the public to “carefully evaluate the risks associated with dealings in digital currencies.”
(All images courtesy of Wikimedia Commons)