We’re only 2 weeks away from 2020, for most Malaysians that grew up during the 80’s and 90’s Wawasan 2020 felt like it was a lifetime away and yet here we are, only a few days away from entering a new decade.
Before we transition to the new year, I felt would be worthwhile for us to reflect on some of the key developments for 2019 and some of the stories that have shaped Malaysia’s fintech landscape.
Here are our picks for the top 5 stories:
Malaysia Moves to Regulate Cryptocurrency Exchanges and Digital Assets
As early as January 2019, just as we entered a new year, Finance Minister Lim Guan Eng’s announcement of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 sent shockwaves through the industry.
In this document, it is stated that anyone caught operating a cryptocurrency exchange or raising ICOs without proper authorisation could face up to 10 years of jail and a RM 10 Million fine.
While the prescription order made headlines across the news, a draft framework not yet made ready for the industry which caused quite a fair bit of confusion and speculation.
The Securities Commission of Malaysia team moved quickly to issue a draft within the same month in order to provide some much-needed clarity to the market.
In June the regulator announced that 3 crypto exchanges were granted conditional approval. Subsequently, Luno became the first in Malaysia granted full approval by Securities Commission Malaysia to operate a crypto exchange.
Virtual Banks to Arrive at Malaysian Shores
Ever since Hong Kong issued 8 virtual banking license, virtual banking became one of the most talked about topic within fintech circles in Asia. In March, Bank Negara Malaysia governor Nor Shamsiah unveiled for the first time that Malaysia will be issuing its own virtual banking framework.
During MyFintech Week, BNM’s senior official revealed that the framework was nearly complete and that more than 10 parties were interested to establish a virtual bank in Malaysia. Since then 4 banks, Grab and Boost have each publicly expressed that they were keen to explore the possibility of setting up a virtual bank.
Finance Minister Lim Guan Eng said during the tabling of Budget 2020 that the first exposure draft will be issued by 2019 and the final framework along with applications will be open by the first half of 2020.
MoneyMatch Became the First to Graduate Malaysia Fintech Sandbox
Malaysia’s regulatory fintech sandbox was first issued in 2016 with the first participants approved in early 2017. Since then, we’ve seen the testing period extended for some companies while others have discontinued their participation within the sandbox.
Many were curious at to when they will be seeing the first company graduating from Bank Negara Malaysia’s regulatory sandbox. In June 2018, MoneyMatch announced during myFintech Week that they were officially the first to graduate the sandbox.
They have since expanded to markets like Brunei and Australia.
Malaysia’s National Payments QR, DuitNow Picking Up Steam
DuitNow QR is established under Bank Negara Malaysia’s Interoperable Credit Transfer Framework (ICTF). ICTF mandates that PayNet, as the country’s shared payment infrastructure provider, implement an interoperable and common QR standard for Malaysia.
While we have yet to see widespread adoption of merchants this year we are seeing key players within the ecosystem being onboarded into DuitNow QR. Public Bank was the first bank to adopt the QR standard and GrabPay was the first e-wallet to do so.
Soft Space Launches Tap-on-Phone Payments Solution
While everyone else is betting on the QR payments wave, the folks at Soft Space seems to be surfing against the wave and betting on plastics instead.
In October, Soft Space announced a partnership with PayNet to enable Android-based smartphones with NFC technology to accept and process MyDebit payment. Soft Space has since powered worked with Maybank to power their Tap2Phone solution and most recently CIMB’s Tap and Pay
Their solution enables merchants to accept contactless payments using only their smartphones without the need for an additional dongle or a separate POS device.
Bonus: Malaysia Fintech Report 2019
Well, this entry into the list is not exactly a story per se, but while we’re in the mood for reflecting our recent fintech report does provide some insights and data on Malaysia’s fintech landscape. If you haven’t already downloaded our report, do check it out.