Digital Asset Exchange

In July 2020, the Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) announced it would be permissible to invest and trade in digital currencies and digital tokens on registered digital asset exchanges (DAXs) that satisfy the requirements under the SAC’s resolution. This recognised the importance of digitisation in the capital market and its increasing adoption by market participants. In essence, the SAC has resolved that digital assets are recognised as assets from the Shariah perspective.

To determine the Shariah-compliant status of digital tokens, the following requirements must be met:

To date, Malaysia counts four DAXs:

Based on data from the SC, 450,000 accounts were opened with these DAXs between October 2019 and December 2020. This compares well against the respective 159,333 and 423,264 CDS accounts opened with Bursa Malaysia in 2019 and 2020. In 2022, more than 128,000 digital asset accounts were created. The SC’s Guidelines on Digital Assets, first issued on 28 October 2020, aim to promote responsible innovation in digital assets while managing emerging risks and protecting the interests of issuers and investors. Members of the public cannot offer, issue or distribute digital assets in Malaysia without first registering with or obtaining authorisation from the SC. The list of permissible digital assets in Malaysia includes Bitcoin, Bitcoin Cash, Cardano, Chainlink, Ethereum, LiteCoin, Ripple, Solana and Uniswap.

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