Malaysia

Malaysia enlists China to help end USD dependence for trade

More proposals and currency concepts are emerging as Asia ramps up its efforts to distance itself from U.S. dollar hegemony.

China and Malaysia are considering moving forward on discussions regarding an Asian Monetary Fund, with a distancing from the  U.S. dollar hegemony becoming a greater priority in the region.

On April 4, Malaysian Prime Minister Anwar Ibrahim reportedly said China was open to a proposal to set up an Asian Monetary Fund.

The concept of the Asian-focused fund was floated at a forum on the Chinese island province of Hainan last week, according to Bloomberg.

According to Ibrahim, China’s President Xi Jinping welcomed discussions on a proposed agency to help the two nations — and others in the region — distance themselves from the U.S. dollar and the International Monetary Fund (IMF).

Malaysia is among several Asian nations trying to detach itself from dollar dependence. Its central bank is working with the People’s Bank of China to conduct trade in their own currencies.

In late March, China and Brazil agreed to transact solely in their national currencies, cutting out the greenback completely.

An Asian Monetary Fund was initially considered in the 1990s, but Ibrahim thinks that now is the time, stating:

“Now with the strength of the economies in China, Japan, and others, I think we should discuss this — at least consider an Asian Monetary Fund, and, secondly, the use of our respective currencies.”

Also, in late March, a Russian state official spoke of a new currency for the BRICS alliance, as reported by Cointelegraph. It would be another effort to distance itself from the dollar, incorporating the burgeoning economies of Brazil, Russia, India, China and South Africa.

In October 2022, Chinese government researchers proposed a digital currency based on a basket of Asian currencies.

On April 4, South China Morning Post Columnist Alex Lo opined additional reasons for dollar distancing could exist.

Related: ‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Lo said more countries want to move away from the U.S. dollar, not just for economic reasons, but to “escape the clutches of the gangsterism of U.S. foreign policy, which in the past two decades has weaponized its global dollar dominance with increasing abandon.”

The end of the dollar as the world’s reserve currency could severely impact its value compared to other currencies and crypto assets. It could have a knock-on effect on the $133 billion stablecoin market, which is dominated by dollar-pegged stablecoins.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Malaysian bank works on crypto-friendly ‘super app’ with Ant Group tech

Expected to launch in early 2023, Kenanga’s crypto-friendly super app will feature digital investment management, e-wallet, FX, stock trading and other services.

Malaysia continues accelerating its pace of cryptocurrency adoption as one of the major local banks is moving into cryptocurrency trading as part of its default banking offerings.

Kenanga Investment Bank Berhad, one of the largest private investment banks with more than 500,000 customers, has partnered with China’s tech giant Ant Group to launch a crypto-friendly wallet and trading application.

According to an announcement on Wednesday, Kenanga has signed a memorandum of understanding with Ant to jointly develop Malaysia’s wealth application called categorized as a super app. Under the terms of the agreement, Ant’s digital technology unit will provide Kenanga with mPaaS, a mobile development platform originating from AliPay App.

“Adopted by many businesses to build new apps and optimize the performance of existing apps, our financial-grade mPaaS mobile development platform is well-positioned to support Kenanga in integrating a wide range of products and services into its SuperApp,” Ant’s digital tech president Geoff Jiang noted.

The super app is designed to revolutionize the way of managing wealth in Malaysia by integrating diverse financial services like stock trading, digital investment management, crypto trading, digital wallet, foreign currency exchange and others into a single platform. Kenanga reportedly plans to launch the app in early 2023.

“We look forward to not only unifying a broad spectrum of financial offerings under one roof, but more importantly, to make wealth creation more accessible by democratizing financial services for the millions of Malaysians,” Kenanga Group managing director Datuk Chay Wai Leong said.

He also mentioned that Kenanga started experimenting with digital financial services five years ago, and the new application would bring the company’s growth to the next level. As previously reported, Kenanga has been an active player in the crypto industry, investing in local crypto exchange operators like Tokenize Technology in 2021.

Related: Malaysian regulators add Huobi to investor alert list

Kenanga is also a known partner of the Japanese crypto-friendly retail firm Rakuten, providing Malaysia’s local online stock trading platform Rakuten Trade.

The cryptocurrency industry has seen some action in Malaysia in recent months, with local officials reportedly calling the government to legalize crypto in March 2022. While crypto investment and trading have been legal in Malaysia, the government opposed the idea of adopting crypto as a legal tender.

Malaysian regulators add Huobi to investor alert list

The Securities Commission of Malaysia says Huobi is operating without official registration from local regulators.

The Securities Commission (SC) of Malaysia issued a statement on Monday regarding Huobi’s operations in the country. According to the statement, the crypto exchange is now on the SC’s Investor Alert List. 

Malaysian financial regulators say Huobi has been operating a digital asset exchange in the country without official registration with the SC.

In a follow-up tweet, the SC said that any operations that perform or offer capital market activities within the country require its approval. Those who aren’t granted such approval are considered unlicensed or unregistered entities. Local authorities say investors are “strongly urged” not to invest in such operations.

Additionally, the SC highlighted that anyone who does utilize such a service does so at a risk and would not be able to legally resolve monetary losses.

Such a statement does not bode well for the exchange. Local investors responded to the tweet by saying a simple fix is to change exchanges.

In an official statement, the Huobi Group responded to Cointelegraph, stating that compliance is a core pillar of its business model in every country of its operations:

“We are currently in discussions with Malaysian regulatory authorities regarding our presence in the local Malaysian market.” 

This comes amid an array of developments for the global exchange.

In countries such as Australia and the United States, Huobi is taking steps toward expansion. Australian regulators greenlit the exchange in early August. In the United States, Huobi has secured a FinCEN license, which brings it one step closer to offering services to American clients.

Related: Huobi co-founder reportedly looks to sell majority stake valued at over $1B

While the exchange is taking steps in the right direction in some places, there are road bumps in others, like Thailand and New Zealand. Huobi’s Thailand affiliate recently shut down because it could not fix major systematic issues, despite several extensions from local regulators.

In New Zealand, Huobi announced on Aug. 16 that it will end derivatives trading to complianc with local regulations. This comes only a few months after it won its initial license to operate in New Zealand.