In January this year, Malaysia’s Minister of Finance announced harsh regulations against unauthorized ICOs and the exchange of digital goods that could result in a 10-year jail term or a USD 2.4 million fine.
The order recognized digital currencies and tokens as securities by the Securities Commission Malaysia. This was primarily seen as a negative move against the crypto and blockchain (the underlying technology fueling cryptocurrencies) industries.
Then in June, the Securities Commission announced that it had conditionally approved three cryptocurrency exchanges. Are the winds of change a-blowing in the Southeast Asian nation?
Keeping Up With Global Innovation
It would seem so at the recent Bloconomic Expo 2019 event in Putrajaya, Malaysia, which was officiated by the Ministry of Entrepreneur Development (MED), led by Minister YB Datuk Seri Mohd Redzuan Md Yusof.
Organized by Alphacap Berhad and Malaysia Blockchain Association (MBA), the event had global attendees from 30 countries. The minister’s attendance seemed to signal an early sign of governmental support and commitment towards recognizing blockchain businesses and technology.
In his official address, the minister pointed out the importance of moving as fast as was possible to keep up with the global innovation scene and become a top investment destination. His ministry MED aimed to create and develop innovation-driven entrepreneurs adopting frameworks that would result in exponential growth and would incorporate the latest 4IR technologies such as AI, IoT, big data, and blockchain.
This was in line with Dasar Keusahawanan Nasional (DKN) 2030, a government initiative to develop core competencies and upskill the workforce against a landscape of growing digital transformation.
New Growth Sectors
Currently working on a plan of action that would pioneer new growth sectors via strategic investments, YB said the focus would be on industries such as automotive, aerospace, halal, fintech, big data analytics, and tech-driven agriculture, amongst others. These were necessary building blocks pivotal to realizing the DKN 2030 objectives.
“This ultimately acts as a catalyst in creating more innovation-driven products, and services that are market-oriented," he continued. “We need to realize our capacity as a producing nation that manufactures more globally competitive products.”
YB saw blockchain technology playing an integral role in the fintech, agricultural, and halal industries. He also welcomed "a strong push by the private sector," which his ministry would "try to facilitate as fast as we can.”
Blockchain as a Catalyst
At the media session, YB opened up about the need to overhaul the government’s bureaucratic processes and going paperless. He saw the adoption of blockchain enabling this, following in the footsteps of the Emirates and Indonesia.
Another potential area for blockchain is the halal industry, which is valued at 27 trillion ringgit. YB was keen for Malaysia to develop blockchain technologies in this industry, pointing out that 10% of that would triple Malaysia’s GDP.
According to MBA statistics, once digital strategies such as blockchain were in place, a projected growth of 15-20% in GDP could be expected. He commended the efforts and initiatives of both MaGIC, an innovation center under MED and Malaysia Blockchain Association (MBA) as “the catalyst that will drive blockchain technology forward, engaging with both government and public.”
Supporting Blockchain Entrepreneurship
Dzuleira Abu Bakar, CEO of MaGIC chimed in, ”We realize that blockchain is an important technology. The usage is widespread, and we’re trying to develop competencies in this locally. So the MOU with MBA is intended to facilitate that.” She was referring to the blockchain initiative between MaGIC and MBA in creating a Blockchain Research Lab.
President of MBA, Dato Rayson added, “Malaysia’s blockchain landscape has improved with support from the Ministry of Entrepreneur Development. MBA has a role to play in educating [the Malaysian] society on how important blockchain technology is to the ecosystem as well as connecting the two different worlds of e-commerce and blockchain. Malaysia’s digital transformation will land global investors in Malaysia, putting the spotlight on the large number of great projects that we have.”
Recognizing the need for "bravery", YB said, “To capitalize on innovations, we need brave entrepreneurs, not followers. Malaysia has been identified as a top destination for investment, one of the most successful nations for startups. We can use this as our starting point and show the world that we can do more in terms of adopting blockchain, that Malaysia boleh (Malay word meaning ‘can”) and that Malaysia can be an example to the world!”