• Prime Minister of Malaysia, Anwar Ibrahim, aims to position the country as a leader in cryptocurrency and blockchain innovation.
• Also plans to develop general policies fostering digital finance.

Malaysia is positioning itself as a key player in cryptocurrency and blockchain innovation, inspired by the remarkable progress of the United Arab Emirates (UAE).

Prime Minister Anwar Ibrahim recently completed a three-day visit to Abu Dhabi, where discussions with Binance co-founder Changpeng “CZ” Zhao and UAE leaders renewed Malaysia’s interest in developing comprehensive cryptocurrency policies. Anwar’s proactive approach highlights Malaysia’s determination to stay competitive in the digital finance sector.

Learning from the UAE’s playbook

The UAE has emerged as a global leader in blockchain and cryptocurrency innovation, creating a centre that acts as an example for other nations. Strategic investments, clear regulations, and tax incentives have all contributed to the UAE’s success.

Reports indicate that cryptocurrency transactions in the Emirates rose by $34 billion, marking a 42% increase from the previous year. The UAE government’s decision to exempt cryptocurrency transactions from value-added tax, retroactively applied to 2018, has been a major factor in attracting businesses and investors.

Anwar acknowledged the UAE’s achievements and noted that Malaysia could benefit from adopting a similar approach. “The is an evolution which happens quickly and requires us to be equally fast. We feel that Malaysia should not be left behind while mired in an old financial system,” he said. During his discussions with Abu Dhabi officials and Binance’s Zhao, Anwar emphasised the importance of forging partnerships to accelerate Malaysia’s entry into the cryptocurrency space.

A vision for Malaysia’s digital future

During the visit, Anwar explored topics like digital transformation, AI, and data centre development – all of which he sees as integral to Malaysia’s blockchain ambitions. “We have talked about digital transformation, data centres, and artificial intelligence. We now face demands that require us to think about making significant changes,” Anwar said.

“I had lengthy discussions with the Abu Dhabi leadership and Changpeng Zhao, co-founder of the world’s largest cryptocurrency platform, Binance. I proposed several months ago that our agencies, including security, treasury, and Bank Negara, study how Malaysia can explore this so we aren’t left behind. Ensuring that it is regulated could safeguard the people’s interests and prevent leakages.”

The Prime Minister plans to draft a policy paper for cabinet review, outlining regulatory frameworks designed to protect public interests and foster innovation. He stressed the urgency of taking action, likening the cryptocurrency revolution to the transformative power of AI. “We should not sit idly by and wait and later be forced to do so after others have done it already,” he said.

Why the UAE stands out

Industry experts cite the UAE’s ability to provide tax relief, attract global talent, and encourage investment as important drivers of its success. One notable example is Tether’s collaboration with Abu Dhabi-based firms to introduce a Dirham-backed stablecoin, which has strengthened the UAE’s position in digital finance. In commenting on the UAE’s achievements, Eric Trump said the country’s proactive stance was admirable.

“The UAE has shown how to do this right. By supporting cryptocurrency innovation, they’ve created jobs, attracted investment, and strengthened their global standing. The US can and should do the same.”

Malaysia’s next steps

Anwar acknowledged the difficulties associated with adopting new technologies, but emphasised the significance of preparation and collaboration. “As with all new ideas raised, there will be some concerns. We have to train our personnel, develop competency, and get the players to participate,” he said.

Anwar’s vision extends beyond policies; he aims to build what he describes as a robust digital finance ecosystem. He highlighted Malaysia’s strong ties with the UAE, noting that collaboration will be key to ensuring a smooth transition. “We told them that we would move on this on the condition that we work as partners to ensure that things are on track. The will be a radical departure from the old ways,” he said.

A regional trend

Malaysia’s ambitions align with a broader regional trend. Countries like Singapore and Thailand also offer cryptocurrency regulations that establish themselves as hubs for digital finance. However, the UAE has set a high standard, showing how strategic planning and proactive measures can deliver economic and technological benefits.

The UAE’s experience offers a roadmap for Malaysia. By using insights from the Emirates and fostering international partnerships, Malaysia has the potential to emerge as a competitive player in the global cryptocurrency landscape.

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