The Bank Negara Malaysia (BNM), the central bank of Malaysia, is working on a regulatory framework for digital currencies such as bitcoin, BNM governor said recently.

Speaking at a counter-terrorism financing summit, Governor Muhammad Ibrahim said that the framework is aimed to guard against money-laundering and terrorism financing, as reported by Reuters. Starting next year, the entities involved in converting cryptocurrencies into traditional currency will be regarded as “reported institutions” under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act, he said.

According to the BNM, these reporting institutions are required to undertake measures to prevent their firms from being used as a vehicle for money laundering and terrorism financing activities.

“This is to prevent the abuse of the system for criminal and unlawful activities and ensuring the stability and integrity of the financial system,” Ibrahim said.

This latest development comes at a time when the central bank is increasingly exploring central bank issued digital currencies (CBDCs). In September, the BNM published a report, entitled “Central Bank Digital Currency: A Monetary Policy Perspective”.