When people think of Asian financial capitals, they usually think of Hong Kong or Singapore. As products of Britain’s imperial history, the two cities have a lot in common, such as a common law judicial system and a workforce with a strong grasp of English.
On the surface, Singapore is referred to as Asia’s crypto powerhouse, which makes sense. The Monetary Authority of Singapore’s regulatory system has been described as a holistic approach to crypto that recognizes the asset class’s particular complexity, whereas Hong Kong employs a fragmented approach that, despite everyone’s best efforts, frequently feels like a square peg in a round hole.
But we’re overlooking Malaysia. Malaysia, too, is a former Crown colony with a common law court system and institutional English use. There is no deterioration of this legacy, as there is in Hong Kong, and the beaches are nicer than those in Singapore. The cost of living is also lower.
Yes, Malaysia isn’t as clean and devoid of corruption as the Lion City, but it also doesn’t have Gigachad Lee Kuan Yew at the helm to battle corruption. Police receive bribes, and sovereign wealth funds are looted (to pay the Wolf of Wall Street, no less). However, they are aware that it is illegal, and individuals are prosecuted, as well as political parties, in their boisterous democracy.
Trade the world’s famous Cryptocurrencies like Bitcoin and Ethereum as well as more rare coins, Forex, CFDs, and Binary options in Malaysia with trusted brokers
The judicial DNA is in the correct place, and the system’s “bones” are in good shape. A land title, for example, is safe because to the Torrens system of title, which enshrines property rights through professional surveying and a central registry rather than a patchwork of fiefdoms. In fact, until Malaysia’s parliament opted to eject the island from the confederation, Singapore was the only country to obtain independence involuntarily (take that, Taiwan).
With the British common law in situ, Malaysia has the advantage of being able to use case law (law based on judicial judgements) when making regulatory decisions. Case law is usually the preferred means of dealing with a dynamic landscape that statute or regulation isn’t exact enough to target because of its clarity. When authorities opt to rule by enforcement rather than statute, lawyers who specialize in regulatory matters in common law nations are concerned.
Fusang, based in Malaysia’s Labuan region, appears to be doing well. Labuan, which was established in 1990, is being advertised as Malaysia’s Hong Kong, a midshore jurisdiction within Malaysia that is immune from some of the country’s rules and taxes. Labuan was a little hidden and unknown until Fusang’s digital equities and bond offerings put it on the map.
“Paper shares today, digital shares tomorrow,” says CEO Henry Chong, noting that this isn’t a new asset class that requires new regulations. Because there are already securities rules in place, there is already clarity.
Chong believes the market is well-informed about digital assets. Those who argue contrary are expressing their displeasure with having to follow the rules.
Malaysia, on the other hand, lacks Hong Kong’s sophisticated capital market. In the same way that Hong Kong is associated with being a financial center, Kuala Lumpur is not. Singapore isn’t even on the list, based on the stats.
“Geography becomes less important in the digital age. Hong Kong is a classic example of a financial hub that grew established around topography. “There’s a sense of proximity there,” Chong explained. “People wanted to connect and communicate, therefore Hong Kong became Hong Kong.”
According to Chong, jurisdictions will begin to compete more, and Malaysia has a strong case to become the next center.
Chong isn’t the first to advocate for it. CoinGecko, a tough competitor to CoinMarketCap, was started in Malaysia and is still operational there, as well as in Singapore. Malaysia’s capital gains tax exemption on cryptocurrency remains in place, and the country’s educated, English-speaking workforce is swiftly making an impression on DeFi industry players.
The response of Hong Kong to COVID-19 has resulted in a large migration that may benefit Malaysia. According to published figures, 76,000 more people have left the city than have come since March 2020, with the pace of departures picking up in the last week as the city tries to impose its most stringent covid restrictions ever (even its most vocal fans are deciding now is the time to go).
Some are returning to Europe, some to Thailand for a vacation, and still others to Malaysia. Work will continue to be the order of the day, as remote working has become the norm. However, the issue remains as to how many will return. This could be the impetus for the sector to pursue decentralization, particularly in places with similar legal DNA.
Subscribe for our newsletter
Get Forex brokers reviews, market insights, expert analytics and education material right into your inbox for free!