Malaysia intends to facilitate the inclusion of digital currencies and enhance the protection of assets

The Malaysian Securities Authority has announced new proposals to update the regulatory framework for digital asset trading platforms (DAX), allowing these platforms to include some digital currencies without the need for prior approval from the authority, provided that specific criteria are met.

This trend comes in light of the rapid growth of the sector, as the volume of trading in the Malaysian market during 2024 amounted to about 13.9 billion Malaysian Ringet (equivalent to $ 3.31 billion), which represents more than twice the volume of trading in the previous year.

The authority indicated in the recently released consultation paper that the current organizational framework, which has been adopted since 2019, has contributed to protecting the Malaysian market from the major collapses that the sector witnessed globally, such as the Terra Luna and FX crises, but that the increase in the interest of individual and institutions in digital assets requires an update of organizational procedures.

The proposed amendments include granting DAX operators the authority to include digital currencies directly, provided that they have been subjected to security auditing, and have been circulated for a period of no less than a year on a platform compatible with the criteria of the Financial Working Group (FATF), as well as fulfilling additional requirements within the recognized market instructions (RMO Guidelines).

The amendments also include enhancing the protection of the assets of investors, by obliging the platforms to save 90% of the digital assets in a cold governor (not connected to the Internet), provided that the remaining percentage is preserved in a hot, completely covered portfolios, and the authority continues to receive notes from investors and the public until August 11, 2025, in preparation for the approval of the final formula of the amendments.

Malaysia began its first serious steps towards organizing the digital assets market in January 2019, when the Malaysian Securities Authority (SC) issued an official order considering digital currencies and digital cards as securities under the Markets and Financial Services Law.

This was followed by the issuance of recognized market guidelines (RMO Guidelines), which laid the legal foundations for registering and operating digital asset trading platforms (DAX).

Since then, a number of recognized market operators have been registered to operate Dax platforms, most notably Luno Malaysia, MX Global and Tokeenize Technology, which allowed Malaysian investors an organized and safe circulation environment, and this framework contributed to protecting the local market from global collapses such as FTX and Terra Luna, thanks to compliance requirements Strict and preservation of assets in a cold governor.

By 2024, the volume of trading in the Malaysian market for digital assets reached 13.9 billion Malaysian Ringet (about 3.31 billion dollars), which reflects the rapid growth of the sector, this success prompted the authority to propose new amendments in 2025 to accelerate the inclusion of digital currencies and enhance the protection of investors, in line with the developments of the regional and global market.