The past year has been a rather choppy ride for cryptocurrencies. The peaks included bitcoin and other digital currencies that reached unprecedented heights in terms of price and popularity. Additionally, Bitcoin futures were introduced, and established financial institutions are finally beginning to notice the positive effects of virtual currencies.
There were also a few dramatic declines including price drops and exchange breakouts. However, a major blow came in the form of countries banning cryptocurrencies, with China banning both ICOs and Bitcoin.
But not everything is gloomy and gloomy. Some governments have embraced the industry and are working to integrate it into their financial systems in some way.
One of these countries is Malaysia. Johari Abdel Ghani, the country’s finance minister, said the central bank would not ban virtual currencies as this would “stop innovation and creativity in the financial sector.”
Instead, according to Ghani, the country will work to find “a balance between the public interest and the integrity of the financial system.”
He went on to add:
“It is not the intention of the authorities to ban or put an end to any innovation seen as beneficial to the public.”
This positive news comes shortly after Bank Negara Malaysia (BNM) Governor Muhammad Bin Ibrahim said something a bit different in October last year. He stated that he could not definitively confirm that a ban on encryption would not occur in the future.
Although the country does not criminalize cryptocurrencies, Ghani said the central bank will focus on
“Adequate regulation and oversight is needed to ensure that any risks associated with these schemes are effectively contained.”
Ghani touched on how important virtual currencies are in the development of the country’s current financial system. This will not only improve productivity, but also allow financial intermediation to be “smoother.”
The country plans to be part of the ongoing digital revolution, and Ghani added that cryptocurrencies and their e-wallets are “an integral part” of this.
In addition, he stated that cryptocurrency regulation will only be considered after authorities have a “comprehensive understanding” of the industry. It is to explain:
“This is especially important [a] recent innovation like Bitcoin, which, unlike traditional mediums of exchange, remains globally unregulated and untested for shocks.”
Cryptocurrencies and Blockchain are seen as disruptive technologies, which may evoke negative correlations. However, as the world progresses, the reality of being left behind begins to emerge. Established practices and procedures will likely have no place in the new decentralized future. Countries that do not participate in the Blockchain bandwagon may be left behind, at the expense of their economies.