Malaysia still does not recognize cryptocurrencies as legal tender, and these are not yet payment instruments regulated by the National Bank.
According to a message from Second Deputy Finance Minister Yamani, Malaysia is not currently committed to cryptocurrencies such as Bitcoin and Ethereum as legal tender. These currencies are still not suitable for everyday transactions as they do not possess the universal characteristics of a currency.
Cryptocurrencies are not a good medium of exchange or value retention due to their high price volatility, cyber security threats, and lack of scalability.
Companies are allowed to raise funds through digital assets, but they must comply with the conditions set by the Securities Commission of Malaysia, namely the Capital Market Execution and Services (Prescription of Securities) (Digital Currency and Digital Tokens) Order 2019.
In addition, if you are an active cryptocurrency trader and have earned money in cryptocurrencies, you will need to report your earnings in cryptocurrencies together with your tax return. A physical or non-physical trader in cryptocurrency is considered to have earned ordinary income as long as there is profit, and the exact amount of tax may be calculated based on the value of the cryptocurrency at the time of the transaction, or it may be estimated based on the physical value of the transaction.
Cryptocurrencies are involved in a wide range of transactions and businesses, such as making purchases and sales of the cryptocurrency itself, as well as using cryptocurrencies to make purchases and accepting it as a unit of payment. Although the amount of income earned is not clear, the Revenue Department, with the assistance of the various regulators, can correctly assess the profits from these transactions.
