A while ago I wrote a short piece on AMBD’s position on cryptocurrencies and how it wasn’t legal tender. A few weeks ago our monetary regulators issued an addition to their previous statement. This was to remind the public on their stance and provide additional information with regards to things that fall onto their jurisdiction. This press release informs us on the things that do come under their purview.
AMBD’s position on cryptocurrencies
Autoriti Monetari Brunei Darussalam or AMBD’s position on cryptocurrencies has always been non-hostile; warning the public of its dangers as speculative investments while encouraging FinTech at the same time. So far, we know that cryptocurrencies such as Bitcoin, Ethereum, Litecoin and the like are not what’s known as “legal tender”. Sure, you can’t buy and sell products legally (at least in the laws surrounding transacting) using cryptocurrency. But what about those of us who buy, hold and trade?
The main meat of the release are in these paragraphs:
2. AMBD would like to remind the public that whilst cryptocurrencies are not legal tender in Brunei Darussalam and are not regulated by AMBD, the activities surrounding them could be regulated if they fall under any of the activities regulated in the relevant legislations under AMBD’s purview. This may include, but is not restricted to, providing financial services to the public in the form of taking of deposits, extension of loans, remitting funds across the border, foreign exchange services, and the issuance of securities.
3. Individuals or companies that seek to conduct commercial activities that are related to cryptocurrencies should seek independent legal advice on whether the activity falls within the relevant legislations under the purview of AMBD.
Whew! It was a bit long-winded for me to read over multiple times so I’ll give what I understand from their points:
1. Cryptocurrencies are still not legal tender and therefore not regulated
Nothing has changed there. This is just a simple reminder to us all. If you choose to pay for your nasi katok using Bitcoin and got scammed, they can’t help you because it’s not legal tender to begin with.
2. Activities relating to cryptocurrency may be regulated
“Activities surrounding” cryptocurrencies may be regulated. Um ok? In a nutshell, that’s super canvassing. They even mention things like financial services, deposits and whatnot. To me, this might mean any transactions that involve using fiat: buying and selling cryptocurrency also inclusive. Because we still need to use “real money” to transact and buy “internet money”, right?
Regulation itself will be based on current laws we have in place, of course. Unless legislators come up with some sort of a Cryptocurrency Act (Brucoin, maybe?). What are the laws applicable under AMBD, you ask? It’s a bit of a list but here it goes:
- Banking Order, 2006
- Islamic Banking Order, 2008
- International Banking Order, 2000
- Finance Companies Act, Chapter 89
- Hire Purchase Order, 2006
- Pawnbrokers Order, 2002
- Insurance Order, 2006
- Takaful Order, 2008
- International Insurance and Takaful Order, 2002
- Motor Vehicle Insurance (Third Party Risks) Act, Chapter 90
- Money-Changing and Remittance Businesses Act, Chapter 174
- Securities Markets Order, 2013
- Securities Markets Regulations, 2015
- Secured Transactions Order, 2016
Note: There may be Brunei Laws that I may have missed so don’t take this list as one that’s complete!
3. Seeking legal advice
The most important point being this: Any business or transaction you intend to carry out with regards to cryptocurrency will most likely fall under one or more of the above legislations. So don’t simply assume “well, I’m just selling my Bitcoins to Mr. Z, it doesn’t apply to me” because it just might!
Which is why they added the part advising people to seek legal advise. So a cryptocurrency business may sound exciting, but if it doesn’t satisfy the legal requirements, it will never fly in Brunei.
So what does all this mean?
In a nutshell, AMBD is telling people who are trying to profit through crypto-trading, buy, sell or even mining: “we’re watching”. They can also legally take action because of the potential risks that come with the benefits of decentralised money. For one, cryptocurrency is considered a red flag in suspicious transactions. Another major issue they’re probably worried about is money laundering. AMBD actually released another piece not long ago reminding about the law against bringing BND15,000 cash across borders.
I believe it will impact businesses more in this regard as they get more exposure (they need to pull customers to make profit). But on a personal peer-to-peer level, it’s more of a caution. If nothing goes wrong that sparks some sort of conflict, it’s unlikely something drastic will happen. Besides, we operate on a “if it’s not reported, then there’s no problem, right?” mentality. Ah, but that’s a separate topic altogether!
Conclusion of AMBD’s position on cryptocurrencies
AMBD reiterated their position on cryptocurrencies with a caution towards those intending to dabble in it for profit. While it doesn’t seem like they’re trying to “crack down” on it, I guess it’s more for the benefit of the general public; especially those who are curious and uninformed. All in all, I believe that as long as you operate within the law, they will have no reason to bother you.
You can find the full press release here.
I want to also praise the fella who wrote the last bit:
AMBD will also continuously monitor the developments surrounding cryptocurrencies, by balancing the need to foster innovation and the need to protect the public.
Image-wise, I do see them as stepping up as Regulators. Finding the balance will be a challenge but I have faith in them to do what’s best, so far.
Perfectly balanced, as all things should be.
– Thanos, Avengers: Infinity War (2018)