Legal Governance of Digital Currencies in Malaysia

Amid the global surge of digital currencies, Malaysia, as a key Asian economy, is actively exploring legal regulatory frameworks for their governance. This article reviews the global development of digital currencies such as Bitcoin and Digital RMB, and analyzes Malaysia’s current regulatory landscape, including the "Digital Assets Guideline", the Anti-Money Laundering Act, and capital market regulations. Despite Malaysia’s open stance, existing regulations face challenges such as definitional gaps, limited public trust, insufficient technological infrastructure, payment system incompatibility, and financial crime risks. By comparing regulatory approaches in the United States, China, and Singapore, the study identifies differences and shared challenges. It further proposes policy recommendations for Malaysia, including introducing the "Digital Ringgit", enhancing public awareness, fostering financial innovation, improving regulatory frameworks, and engaging in international standard-setting. Ultimately, Malaysia must balance innovation and regulation to promote healthy digital currency development and financial modernization.