Is cryptocurrency regulation legal in Malaysia?

As Malaysia becomes a major hub for cryptocurrency in Southeast Asia, it has implemented high standards – similar to those in Singapore, Hong Kong, or the Philippines – to regulate its digital asset ecosystem. Although cryptocurrencies are regulated as securities under the supervision of the Securities Commission Malaysia (SC), they aren’t currently legal tender by the central bank.

In this article, we zoom in on Malaysia’s current cryptocurrency regulatory frameworks, the compliance obligations for digital asset exchanges (DAXs), and what the country’s developing central bank digital currency (CBDC) holds for the future of digital finance. 

Is cryptocurrency considered legal tender in Malaysia?

Yes, cryptocurrency is legal to trade and own in Malaysia, but it is not recognized as legal tender. The country’s central bank, Bank Negara Malaysia (BNM), has repeatedly confirmed this status, advising the public to remain cautious of the risks associated with digital assets.

While Malaysia’s Ministry of Finance maintains that digital currencies – such as Bitcoin and Ethereum – are not suitable as standard payment instruments or stable stores of value, the government has actively embraced the underlying technology. The country’s tech-savvy population of over 33 million, combined with an e-wallet penetration rate exceeding 87%, has helped drive rapid adoption of digital financial services.

Overseen by the SC, digital assets are classified as securities, creating a structured and secure ecosystem for investors and businesses alike.

What are the cryptocurrency regulations in Malaysia?

Rather than creating an entirely new legal framework, cryptocurrency regulations in Malaysia are integrated into existing financial legislation. The Malaysian authorities treat cryptocurrencies and digital tokens as securities. Consequently, they are regulated under securities laws overseen by the SC, pursuant to the Capital Markets and Services Act 2007 and the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019.

How are digital asset exchanges regulated?

Malaysia regulates DAXs under strict anti-money laundering and counter-terrorism financing (AML/CFT) frameworks. The primary rules governing these intermediaries include:

• The Guidelines on Prevention of Money Laundering and Terrorism Financing for Capital Market Intermediaries.
• The Guidelines on Recognized Markets were most recently amended in May 2026 to strengthen client asset safeguards, governance standards, and operational resilience.

To operate legally, cryptocurrency exchanges must register with the SC. The registration process involves meeting strict criteria, including demonstrating the fitness and propriety of senior management and establishing robust systems to manage AML/CFT risks. Once registered, exchanges must comply with ongoing AML/CFT obligations – such as implementing comprehensive customer due diligence (CDD) measures – and submitting suspicious transaction reports (STRs) to the SC. The SC actively enforces these obligations by continuously blacklisting fraudulent crypto platforms and investors.

In January 2026, the SC further expanded the framework by issuing Practice Note 1/2026, which clarifies requirements for licensed capital markets services (CMSL) holders offering broking services for digital assets. Under this framework, stockbrokers may offer digital asset trading services subject to conditions including full client asset segregation, cash-upfront transactions, and prior notification to the SC.

As of 2026, there are six registered digital asset exchanges operating under cryptocurrency regulations in Malaysia: 

• HATA Digital Sdn Bhd.
• Luno Malaysia Sdn Bhd.
• MX Global Sdn Bhd.
• SINEGY DAX Sdn Bhd.
• Kinetic DAX Sdn Bhd.
• Torum International Sdn Bhd.

The SC has approved 22 specific cryptocurrencies for trading across these platforms, including mainstream coins (such as BTC, ETH, XRP), public chain coins (such as SOL, ADA, DOT, MATIC), and DeFi coins (such as UNI, AAVE, CRV). 

What is the future of Malaysia’s cryptocurrency regulations?

While Malaysia does not intend to adopt cryptocurrencies as legal tender, the regulatory environment continues to mature rapidly. Total cryptocurrency transaction volume on licensed exchanges grew to USD 11,527 million in 2025. Looking further ahead, Malaysia’s cryptocurrency market is projected to reach USD 25.4 billion by 2034, at a compound annual growth rate of approximately 8.9%.

A major shift is also underway in how tokens are admitted to trading. From 2026, the SC is allowing registered DAX operators to independently list qualifying digital assets based on their own governance and due diligence processes, without requiring prior SC approval for each token. This replaces a more centralized approval model and is intended to reduce listing timelines significantly while placing greater accountability on operators.

More broadly, the government has prioritized the development of a regulated Web3 and digital asset ecosystem, supported by the Ministry of Digital and the SC’s continued efforts to safely expand regulated digital services.

Is Malaysia developing a central bank digital currency?

Yes, Malaysia is actively advancing its work on digital currency across multiple fronts. BNM completed a domestic wholesale CBDC proof-of-concept (PoC) in 2025, forming part of its broader push to modernize payment systems and explore cross-border CBDC applications with international partners. This builds on Malaysia’s earlier participation in Project Dunbar – a collaborative initiative with the central banks of Australia, Singapore, and South Africa to test multi-CBDC platforms for international settlements.

Additionally, in 2026, BNM launched an expanded digital asset regulatory sandbox under its Digital Asset Innovation Hub to pilot ringgit-denominated stablecoins and tokenized deposits, with major financial institutions including Standard Chartered Bank, CIMB, and Maybank participating. BNM has indicated it intends to provide greater regulatory clarity on the use of ringgit stablecoins and tokenized deposits by the end of 2026, with these experiments potentially informing the future design of a retail CBDC.