Malaysia has established itself as a crypto-friendly nation, navigating a unique path where digital assets are legally recognized as securities but not as a form of legal tender. The country's regulatory bodies, including the Securities Commission Malaysia (SCM) and Bank Negara Malaysia (BNM), are actively working to build a robust framework to oversee the crypto market.
In 2025, several key developments have occurred:
- Regulatory Framework: The government is focused on regulating cryptocurrencies as securities. The SC has issued a public consultation paper to seek feedback on digital asset exchange regulations and is exploring the possibility of allowing certain tokens to be listed on regulated exchanges without prior approval. Concurrently, the Capital Market and Services Order was amended to revise the definition of a digital token, strengthening the SCM's authority to regulate offerings and trading.
- Payment Alternatives: In a significant move, Bank Negara Malaysia (BNM) released a working paper in July 2025, exploring the potential of Bitcoin and XRP as future payment alternatives to traditional currencies. The bank is focusing on consumer protection and a stable technological framework to manage price volatility.
- Licensing and Compliance: To operate in Malaysia, crypto businesses and platforms must adhere to strict licensing requirements. Licenses are categorized by function—Issuer, IEO Operator, and Digital Asset Custodian—each with its own minimum capital requirement. Non-compliance can lead to severe penalties.
- Taxation: Malaysia does not have a specific capital gains tax on crypto for occasional investors, making it a "tax-free" event. However, individuals or businesses that engage in high-frequency trading or receive crypto as compensation are subject to income tax, which ranges from 0% to 30%.
- Adoption and Market Growth: The crypto market in Malaysia is showing steady growth. The user penetration rate is projected to reach 12.77% in 2025 and is expected to grow further. The market's revenue is also anticipated to reach US$484.1 million this year, with continued growth projected for 2026. While the Malaysian government does not publicly hold crypto reserves, it actively monitors digital assets within its financial system.
In conclusion, while Malaysia maintains its stance against crypto as legal tender, its proactive approach to creating a clear and regulated environment positions it as a significant player in the global crypto space, balancing innovation with consumer protection.
August 2025, Cryptoniteuae