The Malaysian authority that oversees compliance with Islamic law in finance has permitted digital asset trading.
In a landmark announcement, Securities Commission Malaysia’s Shariah Advisory Council declared that digital assets trading was permissible.
The Malaysian Shariah Advisory Council is the authority that oversees the implementation of Islamic laws in the operation of Islamic Financial Institutions.
Securities Commission chairman Datuk Syed Zaid Albar made the announcement during an online conference Invest Malaysia 2020 on July 7, stating:
“The SC Shariah Advisory Council has resolved that in principle, it is permissible to invest and trade in digital currencies and tokens on registered digital asset exchanges.”
A way forward for the Malaysian crypto space
Kelvyn Chuah, the founder of SINEGY, the first Malaysian digital asset exchange approved by Malaysia’s securities watchdog, told Cointelegraph that the announcement bears extreme significance as more than 60% of Malaysian are Muslims.
Chuah added, “At the same time, Malaysia is aiming to be the hub of Islamic Finance and fintech. This announcement does clear the many ambiguities still tied to digital assets.”
Further explaining the stance of the Shariah Advisory Council regarding digital assets, he said “currently all regulated digital asset trading is permissible while there are several non-compliant activities that will remain disallowed.”
As the Malaysian Muslim community awaits a Shariah-compliant resolution for trading digital assets, companies like SINEGY can now explore potential services that may welcome more Muslims into the digital asset space, Chuah explained.
“The industry is closely waiting for SC’s full guidelines on digital asset token issuance. We also think that the regulators may be looking at having a regulated digital asset derivatives market in the mid-term future,” he added.