All Malaysian digital asset offerings will now need government authorization and will have to meet anti-money laundering and cyber-security guidelines. The Securities Commission is beginning to implement new regulations on Initial Coin Offerings (ICOs) and the trading of digital assets, this is because up to now this sector has been unregulated.
Malaysia’s Finance Minister YB Tuan Lim Guan Eng announced that cryptocurrencies and initial coin offerings have come under regulation on from Tuesday 14 January.
He said that the “Capital Markets and Services Digital Currency and Digital Token Order, 2019” would establish criteria for coin issuers and exchange operators and bring about disclosure of standards and best practices in pricing, trading and client asset protection.
Any future digital asset offerings will require Securities Commission authorization, will have to meet anti-money laundering and counter-terrorism financing rules and will have to demonstrate cyber-security and business continuity measures.
Mr Lim said that “The Ministry of Finance (MOF) views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”
As per the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, crypto currency service providers and exchanges are required to obtain authorization from the country’s Securities Commission, which will work with the central bank to ensure compliance. The Securities Commission Malaysia (SC) said it will issue guidelines to regulate offering and trading of digital assets.
The regulations are expected to be launched before the end of the first quarter in 2019. Any infringements of the new laws can lead to a fine of up to 10 million Malaysia ringgit and 10 years in prison.
The Securities Commission said that in order to implement the regulatory framework on digital assets, it will coordinate with the Bank Negara Malaysia, the country’s central bank, to ensure compliance with laws and regulations.
Since the announcement of the Capital Markets and Services Digital Currency and Digital Token Order, 2019”, the Securities Commission has been in contact with existing digital asset platform operators and arrangements have been put in place to enable these platforms to continue operating for a transitional period until 1 March 2019, as long as they fulfil conditions laid out by the SC.
During this period, these platform operators are not allowed to accept new investors and will only be allowed to facilitate the withdrawal or transfer of client assets with the written instruction of the investor.
Existing platform operators who failed to or did not attend the engagement with the SC on 17 January 2019 are advised to contact the SC immediately and not later than 25 January 2019, failing which they shall be deemed to be operating a market in breach of the securities laws.
Once the relevant guidelines have been issued, existing platform operators will be required to apply to the SC for authorisation if they intend to operate beyond the transitional period.
With regard to initial coin offerings (ICOs), the Securities Commission Malaysia has stated that ‘no person shall conduct an ICO without the prior authorisation of the SC. In this regard, the guidelines for ICOs will be issued by the end of Q1 2019. In the meantime, ongoing ICOs should cease all activities and return all monies or digital assets collected from investors.’
The Indian Tax department has been appreciated for its continuous efforts towards making India’s tax administration taxpayer-friendly, transparent and geared towards facilitating voluntary compliance by Union Minister for Finance & Corporate Affairs, Ms Nirmala Sitharaman
There has been a paradigm shift in its role in recent years, from being just a revenue collecting organisation to becoming a more citizen-centric organisation.
Various reform measures will pave the way for an Aatma Nirbhar Bharat, India’s ambitions of becoming self-reliant.
Dr Ajay Bhushan Pandey, Finance Secretary, recognised that the tax department has had to navigate a delicate balance between enforcement and service.
He appreciated the Department for having increasingly oriented itself towards becoming taxpayer-service centric without compromising its enforcement role by deploying non-intrusive tools of data mining and data analytics.
In the Union Budget 2019, the Finance Minister proposed the introduction of a scheme of faceless e-assessment.
The scheme, first announced by the Finance Minister Ms Nirmala Sitharaman in the 2019 budget speech, is seen as a big leap towards transparent tax administration.
The scheme, a procedure to carry out a faceless assessment through electronic mode, sought to eliminate the human interface between the taxpayer and the income tax department.
The Indian IT Department looks to complete Faceless e-Assessments by mid-September 2020.
Over 3,100 tax personnel, including 600 IT officers are busy implementing the Faceless e-Assessment scheme of Income Tax. Out of 58,319 cases selected for faceless assessment, 8,700 cases have already been disposed.
“This is the first time that we are doing the faceless e-assessment. The work has picked up since July, after having addressed all the issues related to infrastructure, manpower, hardware and software. Our target is to finish all the cases by mid-September” said S K Gupta, Principal Chief Commissioner of Income Tax and Member, Central Board of Direct Taxes (CBDT).
The Income Tax Department in October 2019 rolled out the faceless e-assessment scheme that eliminates physical interface between an assessing officer and an assessee.
Eight cities – Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune are covered under the scheme.
The cases taken up for faceless e-assessment include a mix of returns filed by individuals, businesses, MSME as well as big companies.
The National e-Assessment Centre in Delhi is the single point of contact for the taxpayer as well as for all units conducting assessment.
It is the NEC which issues notices under Section 143(2) to the assessee for which the assessee is required to respond within 15 days of receipt of notice.
Upon the issue of a notice, NEC allocates the case to any Assessment Unit through an automated allocation system, ensuring anonymity.
The conventional system of scrutiny assessment involved a high level of personal interaction between the tax payer and the Income Tax Department officials.
Under the faceless e-assessment system, the tax payer would not know by whom his /her return is being assessed or in which city.
Instead of territorial jurisdiction, the new system has brought in dynamic jurisdiction.
Mr Gupta noted that, “The anonymity and the absence of human interface will go a long way in addressing the issue of harassment as well as curb instances of corruption.”
The Monetary Authority of Singapore (MAS), the National Research Foundation (NRF) and the National University of Singapore (NUS) announced in a press release on 4th August 2020 that they will be setting up a research institute to develop deep capabilities supporting the demands of digital financial services in Asia.
The Asian Institute of Digital Finance (AIDF) will provide thought leadership and strengthen the ties between education, research and entrepreneurship in digital finance. The Institute aims to be running by the end of this year.
Professor Tan Eng Chye, NUS President, said, “FinTech is making a profound impact on financial services, and will continue to drive the transformation of the financial services industry in Singapore, which is an integral part of Singapore’s ambition to be a Smart Nation. NUS is deeply honoured to partner MAS and NRF to achieve the vision of AIDF – the first of its kind in Singapore and this region, which takes an integrative approach to education, research, innovation and business incubation. NUS’ thought leadership in digital technologies such as artificial intelligence, blockchain, cloud computing, and data science makes us perfectly positioned to address the challenges of the digital economy in Singapore and other parts of the world.”
Asian Institute of Digital Finance to offer large range of FinTech subjects
Hosted at NUS, AIDF will offer a Master’s programme and award scholarships to top students to pursue research at the doctoral level, as well as train post-doctoral fellows in Digital Finance and FinTech. Through its education programme, the AIDF will build the FinTech leadership pipeline for Singapore and the wider region.
The AIDF faculty will bring together deep expertise in Finance, Technology and other disciplines that are critical to integrating financial services with technology. These include: Finance domain: Payments, Credit & Lending, Financial Advisory & Wealth, Management, Retail & Corporate banking and Financial Markets. Technology domains: Digital Architecture, Digital Platforms, Big Data, Distributed Technology, Tokenisation, Cloud Computing, UX/UI design, Artificial Intelligence and Machine Learning.
Research will include AI, Machine learning and Next-Gen Financial Services
AIDF will pursue foundational and inter-disciplinary research projects covering fundamental digital infrastructure, performance optimisation of business processes, and advanced application development research on cyber, fraud and anti-money laundering challenges. The institute will also develop financial services to meet sustainability and
Potential areas of focus include: Digital Assets and Ledger Technology, Artificial Intelligence and Machine Learning, Digital Finance Platforms, Green Finance Technology and Next-Gen Financial Services on 5G networks.
Professor Low Teck Seng, NRF Chief Executive Officer, said: “AIDF will help build strong FinTech research capabilities in Singapore, and commercialise high-impact research ideas to deliver practical and innovative solutions for the market. It will leverage on NUS’ regional and global networks involving local and foreign universities and research institutes to generate and testbed FinTech solutions for the Asian markets. More importantly, AIDF will also groom next-generation FinTech leaders that will strengthen Singapore’s Smart Nation core.”
“Fincubator” programme will promote entrepreneurship
The regional research institute will also establish a unique “Fincubator” programme that will promote entrepreneurship and provide the support to drive transformation of ideas and projects by promising students and entrepreneurs into market-ready products and services.
Potential areas of focus include:Applied research for commercialisation, Incubation of financial solutions to solve unmet digital financial service needs of Asia, Industry collaboration to provide comprehensive mentorship to build marketready solutions and Strengthened linkages with investor community to spur research
Mr Ravi Menon, Managing Director, MAS, said, “AIDF will be an important addition to Singapore’s rich and vibrant FinTech ecosystem. Through applied research and active collaboration with industry, AIDF will help to build strong capabilities in digital finance and FinTech. Located in the heart of the fastest-growing digital finance market in the world, the Institute will facilitate the expansion of knowledge and skills among FinTech leaders in the region and support the digitalisation of economies in ASEAN and beyond.”
The Malaysia Digital Economy Corporation (MDEC) recently entered into partnerships with a leading bank and a Chinese tech giant.
On 24 July 2020 MDEC signed a memorandum of understanding (MoU) with the Malaysian branch of a multinational investment bank and financial services holding company.
The MoU focuses on enhancing the adoption of technology among small and medium enterprises (SMEs), large local corporates and multinational companies (MNCs) in the country.
The signing marked the first MoU between both organisations, highlighting the critical role of public-private partnerships in mitigating the adverse effects of COVID-19 on businesses in Malaysia by encouraging companies to embrace digitalisation.
It will identify targeted investments spanning businesses across multiple sectors including technology, healthcare, electronics, manufacturing, education and more from a host of countries including but not limited to China, the USA, the UK and Japan.
The initiative will significantly help push Malaysia forward as a major global digital powerhouse. The CEO of the Malaysian branch stated that the collaboration will help to create opportunities in times of adversity through the effective adoption of technology.
COVID-19 has intensified the need for businesses of all sizes to incorporate innovative digital solutions and strategies into their daily operations.
The parties’ shared commitment to enable the economy’s digital transformation will amplify the integration of technology and fuel business growth in Malaysia.
MDEC’s CEO said corporations like the bank possess market knowledge, resources, established networks, and the validation that companies aspire to attain, while the technology companies possess the agility and novel ideas that corporations value.
MDEC aims to harness these complementary strengths, which will not only advance the nation’s digital agenda but potentially lead to the creation of deep-tech solutions in problem-solving.
The agreement also includes, where relevant and necessary, providing advisory and other banking services to SMEs, large local corporates and multinational companies that are looking at entering the market or expanding their business in the country.
MDEC more recently announced that it signed an MoU with a leading global provider of ICT infrastructure and smart devices to spearhead the initiative to drive Malaysia’s position as the heart of digital ASEAN.
This collaboration will kick start with a white paper development conducted by both parties on identifying and developing key elements to realise the aspiration of Malaysia being the regional digital hub.
Through this partnership, MDEC aims to gain insights and knowledge in addressing the pain points and challenges faced by the digital ecosystem in the country; to be prepared with solutions to enable and facilitate the capacity building to realise the full potential of Malaysia’s digital economy through digital adoption and digital talent development, the CEO stated.
The MoU will focus on developing a robust digital economy, including information and communications technology (ICT) infrastructure, applied innovative technologies (5G, Artificial Intelligence (AI), Big Data, Internet of Things (IoT), digital tech talent and digital connectivity.
This partnership will see the sharing of best practices and knowledge-sharing between both parties, with Huawei taking the lead in providing technical and business advisory strategies and support.
MDEC and the Malaysian branch of the tech giant will continue to conduct joint research and services related to digital technologies by working with various government bodies to publish white paper studies for the benefit of improving Malaysia’s digital economy.
Talent development is one of the key areas to focus to enable sustainable growth across all industries. This will be included in the digital hub framework to emphasise the importance of nurturing digital skilled minded talents and foster a new wave of a digital workforce in the future.
The Ministry of Information and Communications (MIC) has launched a national portal, PayGov, designed to promote electronic payments for public services.
PayGov is not a payment service but acts as a platform to connect public service portals and single-window systems with intermediary payment service providers.
Once connected with the platform, online public service portals of ministries and local authorities will be provided with a single interface to use all the services of the intermediary payment providers.
At the same time, intermediary payment companies can provide their services to all ministries and local authorities through PayGov.
In addition to public services, PayGov can provide payment services for other utilities such as electricity, water, healthcare, and education, all in the one place.
Speaking at the launch ceremony on 24 July, the MIC Deputy Minister, Nguyen Thanh Hung, explained that PayGov is just the beginning of a process to promote electronic payments for public services.
The Vietnamese government is aiming to raise the ratio of public services that can be delivered online to at least 30% by the end of 2020. As of June, the ratio had doubled to 14.6% from the end of last year but remained far behind the target.
The launch of PayGov is anticipated as one of the measures to accelerate the delivery of online public services and meet the above target.
The platform is also expected to help Vietnam realise the target of 50% of the population having electronic payment accounts by 2025, and 80% by 2030 as part of the national digital transformation program.
To date, PayGov has coordinated with nine intermediary payment companies, including Napas, Viettel, and VnPay. More are expected to come soon.
The platform has also connected successfully with the portals of the Ministry of Culture, Sports and Tourism, and Quang Ninh Province and are undergoing tests with the portals of other provinces and cities such as Hanoi and Thua Thien Hue.
Amidst the increased use of online banking and e-wallets, partly fuelled by the COVID-19 pandemic, cybersecurity experts are reminding banks and financial services in Southeast Asia to learn from the lessons of previous cyberattacks like the costly US$ 81 million heist in 2016.
According to a press release, a global cybersecurity company, in an online conference with selected news correspondents from the region, spoke about how the financial sector could utilise comprehensive threat data to beef up their defences against sophisticated cybercrime groups.
Besides threat intelligence, the human factor is also important when it comes to securing financial systems.
The threat of phishing and spear-phishing remains present with the company detecting 40.5 million globally in the first five months of 2020.
To improve banks’ and financial organisations’ cyber defences, experts said they should integrate threat intelligence into their systems, conduct regular security training sessions for staff, use traffic monitoring software, install the latest updates and patches for all of the software they use, forbid the installation of programs from unknown sources, and perform regular security audits of the organisation’s IT infrastructure.
The government via the Communications and Multimedia Ministry, along with other relevant agencies is working together with major communications service providers to develop a comprehensive digital infrastructure plan to meet the people’s needs.
Communications and Multimedia Minister stated that discussions at the National Digital Infrastructure Laboratory (IDN Lab) had commenced on 13 July 2020 with the Malaysian Communications and Multimedia Commission (MCMC) as its facilitator.
These firms had also briefed him on the latest development of the talks in Parliament today, he added.
In its first two weeks of the discussion, the Minister noted that the IDN Lab had agreed in principle on the nation’s aspirations and needed achievements concerning broadband coverage and services.
The Minister noted that special focus is being placed on plans to widen coverage in rural and remote areas, besides also improving broadband services as a whole.
The availability of existing digital infrastructure information as well as other relevant data from various sources would also be enhanced to enable more effective planning.
The results of the final discussions of the IDN Lab to finalise targets related to the development of the country’s digital infrastructure would be known in mid-August.
The government is concerned and aware of the people’s wish to enjoy a satisfactory level of connectivity and quality of experience in communications services.
The Minister stated, “the need for digital connectivity is becoming increasingly important, especially after Covid-19. The planning and construction of a more thorough, comprehensive and quality digital infrastructure that supports the economic sectors and new growth areas have become important aspects.
The results of the IDN Lab will provide a solid foundation very much needed for the 4th Industrial Revolution and 5G mobile technology.
Looking at the progress of the IDN Lab discussions so far, the Minister expressed confidence that a comprehensive digital infrastructure plan could be finalised to enable key sectors to benefit from the digital economy environment and new norms.
According to another article, the Ministry of Communications and Multimedia (KKMM), through the Malaysian Communications and Multimedia Commission (MCMC), hopes more industries will join the 5G Demonstration Projects, which will be held until the end of this year.
Its Minister stated that so far, a total of 71 5G Demonstration Projects had been successfully carried out and which would be helpful towards the government’s preparation to implement the 5G technology commercially later on.
For individual usage, KKMM is working to optimise 4G access for now, but for industries, there is a need for 5G technology.
The Minister noted that as for the oil and gas industry, only Petronas had joined the demonstration project, although his ministry believes that more companies from the industry would be keen to use the 5G technology later on.
In addition, the government is currently evaluating the level of usage and function of the 873 Internet centres nationwide.
This evaluation will help the government determine how much these Internet centres are being used and how up to date their assets are.
Various ministries will then determine if these centres can still be used or not; the situation will be clearer by the end of this year, the Minister assured.
The Government Technology Agency of Singapore – GovTech and Singapore bank DBS has partnered to pilot the use of the SingPass face verification technology with the aim of speeding up the digital banking registration process.
The face verification technology developed by GovTech enables Singaporean citizens and permanent residents to sign up for DBS’ digital banking services to activate their accounts by using a photo of themselves or in other words a ‘selfie’.
DBS Bank is the first in the private-sector to pilot the service, which is integrated into its digibank app.
In a release on 29 July 2020, DBS and Government Technology Agency of Singapore said the pilot programme aims to benefit more than 1 million DBS customers who are SingPass holders and do not use digital banking services.
“Amid one of the greatest disruptions ever witnessed in our time, we are more cognisant than ever about the importance of leveraging digital technology to quickly serve up solutions that benefit the wider public. In line with Singapore’s Smart Nation agenda, we have been introducing innovative digital solutions over the years that provide easier, more seamless ways to bank. Together with GovTech Singapore, we aim to support those who are journeying into digital banking for the first time, and to help foster resilient digital habits that will last for years to come,” said Jeremy Soo, Head of Consumer Banking Group (Singapore) at DBS Bank.
SingPass Face Verification’s launch, with DBS as its first use case, follows a successful trial earlier this month with over 100 seniors and students from ITE College West.
SingPass Face Verification to access bank services
Bank account holders can scan their faces on their phones to apply for an online banking account with the launch of a national facial identification service. The captured facial image will be matched against the national biometric database. Once the match is successful, DBS will send an SMS to the user’s register mobile number for verification.
This database contains the facial images and identities of four million local residents aged 15 years and above, captured through applications for passports and NRICs.
So far, the facial recognition technology has been limited to official purposes, including verification at border checkpoints and in some government buildings to limit access rights.
SingPass Face Verification takes the mobile service forward by matching the captured facial image against the Government’s biometric database. This step allows for greater ease of verifying high-risk online transactions.
Users reported facial verification to be more convenient as they do not need to remember their PIN or use their ATM, credit or debit card to complete the registration process.
SingPass Face Verification technology to sign up for other products and services in 2020
DBS customers will also be able to use the SingPass Face Verification technology to sign up for other products and services by the end of 2020.
The feature is also being piloted in view of significant consumer shifts towards digital services, coupled with the steady rise of mobile and smartphone usage among Singaporeans, where smartphone penetration is expected to reach 80 percent of the population by 2022.
By the end of 2019, the bank noted that the number of customers who had been conducting their banking needs solely via mobile on the bank’s mobile banking app, DBS digibank, almost doubled from 2017 to 2019.
Almost one million DBS customers today are independent digital banking users, which means that they are active on the bank’s digital banking platforms, and have gone more than a year without visiting a bank branch or calling the bank’s contact centre for assistance.
During Covid-19, more seniors have been turning to digital banking to meet their banking needs – the number of seniors who used digital banking in April and May 2020 more than tripled compared to the same period last year.
Earlier this week, the Minister of Communications and Multimedia Malaysia and the Minister of Science, Technology and Innovation co-chaired the first meeting of the Digital Economic Task Force (DETF). The meeting was held in Cyberjaya, Malaysia’s tech hub.
The DETF consists of 32 members including senior officials from relevant Ministries and Government agencies, industry representatives as well as representatives of Small and Medium Enterprises (SMEs).
As empowering the Digital Economy is a key agenda of the country, the Ministry of Communications and Multimedia Malaysia (KKMM) and the Ministry of Science, Technology and Innovation (Mosti), through the DETF, will accelerate and stimulate the nation’s economic sectors that have been affected by Covid-19.
This objective can be achieved in Malaysia by rolling out initiatives similar to the ones which are currently gaining a foothold across the world, where the Digital Economy is a salient part of daily life.
At the same time, efforts made by the Ministries, agencies and those in the private sector within the Digital Economy framework will also contribute to increasing Malaysia’s Gross Domestic Product (GDP).
In addition, the Digitalisation of Government Services Delivery initiative was announced and is included in the Science, Technology, Innovation and Economics (STIE) program under the National Policy on Science, Technology, and Innovation (DSTIN) 2021-2030 through what the two ministries have deemed “Digital Tsunami activities”.
Mosti, through Mimos Bhd and Cradle Fund Sdn Bhd, will push for the expansion and adoption of big data analytics and artificial intelligence. This is meant to ensure value-added creation.
Both ministries have expressed that the establishment of the DETF represents the best and most appropriate opportunity to play an important role in coordinating the implementation of the various digital economic initiatives to drive the country’s economic recovery, guided by the main thrust of the National Economic Recovery Plan (PENJANA) announced on 5 June 2020.
The work of the DETF is guided by four main thrusts namely, empowering the people, propelling businesses, stimulating the economy and enablers.
The DETF meeting discussed the 15 high-impact programs under the four thrusts to accelerate the digitisation of the national economy and make Malaysia a digital and high-tech nation, namely;
Thrust 1: Empowering the People
- Development of digital economy talent
- The Gig Economy
- E-Learning (digital education)
- Adoption of cashless payments
Thrust 2: Propelling Businesses
- Adoption of e-commerce
- Digitisation of Small and Medium Enterprises (SMEs)
- Technology Platforms
- Innovation in startups
- Digital Creative Industry
- Government E-Procurement between SMEs
Thrust 3: Stimulating the Economy
- Attract investments
- Digitalisation of the public sector
Thrust 4: Enabling capabilities
- Digital infrastructure
- Data sharing
Besides this, participants agreed that the DETF must ensure more orderly coordination between agencies while ensuring that activities related to the development of the country’s digital economy do not overlap.
Also discussed at the meeting was the importance of the involvement of local industry. This includes start-ups that supply of digital products and services to public and private sectors. In empowering local start-ups, Malaysia can boost the development of its digital industry.
Cyber trust and security were also in focus at the meeting; with the aim being to encourage and grow the use of digital platforms in business transactions and data sharing.
In the future, DETF meetings will be held periodically and the findings reported to the Cabinet to ensure successful implementation of every high-impact project.