Malaysian central bank to regulate entities converting cryptocurrencies into cash to prevent terrorism financing

Sainul Abudheen
Malaysian central bank to regulate entities converting cryptocurrencies into cash to prevent terrorism financing

BNM governor also emphasised the importance of AI, Machine Learning and Big Data as imperative tools in detecting suspicious financial transactions

Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim

In a an effort to mitigate the risks of terrorism financing, Malaysia’s central bank, Bank Negara Malaysia (BNM), is working on a new regulatory structure for digital currencies (cryptocurrencies), says a New Straits Times report.

The announcement was made by BNM governor Muhammad bin Ibrahim on the second day of the third Counter-Terrorism Financing Summit 2017 in Kuala Lumpur on Tuesday.

Ibrahim mentioned that starting 2018, organisations converting cryptocurrencies into cash will come under the radar of the central bank. Such entities will be tried under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, if found guilty, he added.

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“This is to prevent the abuse of the system for criminal and unlawful activities and ensuring the stability and integrity of the financial system,” Ibrahim said.

In his view, as the importance of cryptocurrencies grows, the role of the financial sector as a bulwark against terrorists’ financing becomes more critical. He suggested a three-pronged defence strategy within the financial system – capitalising on technology, promoting ‘clever partnership’ between the authorities and industry and closer international cooperation.

“We need to prepare ourselves as digital currencies becomes the new norm, according to many pundits,” he remarked.

Ibrahim also emphasised the importance of Artificial Intelligence, Machine Learning and Big Data as imperative tools in detecting suspicious transactions, which are becoming more complex and harder with each passing day.

The Counter-Terrorism Financing Summit is organised by BNM, in partnership with Australia’s financial intelligence agency AUSTRAC, and Indonesia’s Pusat Pelaporan dan Analisis Transaksi Keuangan (PPATK). The 4-day summit, which brings together more than 350 specialists and professionals from 35 countries and international organisations, will be concluded on Thursday.

 

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