Problems Faced By Malaysia In FinTech For Islamic Finance That Is Shariah-Compliant

Problems Faced By Malaysia In FinTech For Islamic Finance That Is Shariah-Compliant

A government official mentioned that the close proximity of Malaysia in the ASEAN region as well as its unique mix of rural, suburban and urban popula

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A government official mentioned that the close proximity of Malaysia in the ASEAN region as well as its unique mix of rural, suburban and urban population, is what makes it the ideal environment for the testing and even launching of the FinTech solutions that targets the global Islamic Finance market.

The chief executive officer of Malaysia Digital Economy Corp (MDEC) called Datuk Yasmin Mohamood, readily opened Malaysia’s doors to Fintech’s companies and startups. Malaysia Digital Economy Corp (MDEC) can be defined as a government institution that is charged with the responsibility of pushing forward the country’s technology-forward agenda.

A huge percentage of the country’s population are Muslims, this is because Islam is recognized as the official religion for the country. In fact, approximately 61% of its people or even more are Muslims i.e. 18.4 million people in numerical form. This fact is what offers a great opportunity for all the financial technology solutions which are fully compliant with Islamic law prevalent in the country.

The regional publication NST reported that Datuk Yasmin Mohamood was giving a speech in Kuala Lampur today at the Finnovasia 2017 Conference. The conference that is scheduled to take two days is among developers such as Ethereum founder Vitalik Buterin who was a speaker in former installments and the largest FinTech events in Asia.

Datuk Yasmin Mohamood who was the keynote speaker claimed that Malaysia is undoubtedly part of the main players in Islamic Finance in the world. This is what qualifies it as a viable test location for the FinTech companies to launch and consequently cater to a market that is unique in its own right.

Yasmin added that Malaysia is also a viable location for all FinTech companies and startups that are yet to find their way into the FinTech sector for the purpose of Islamic finance. The startups and companies can test Shariah-compliant products and launch them in the region of Malaysia and in markets all over the world.

Support for FinTech companies

The Malaysia Digital Economy Corp (MDEC) plans to encourage the nascent while growing the FinTech space. It intends to achieve this by the deliberate development of an organized FinTech ecosystem that promotes improved engagement between investors, developers and startups all over the globe. The Bank Negara Malaysia, which is the central bank of Malaysia and the Securities Commission for the country will support the development of the ecosystem.

In attendance at the FinTech conference were the 2 influential regulators, this comes at a time when the country is taking a stance that is encouraging and embracive towards these financial technology solutions.

Datuk Yasmin Mohamood stated that the MDEC is tasked with the responsibility of improving the digital economy of Malaysia, it is confident of achieving and even surpassing the forecast it had preset for the country’s GDP. The year 2015 saw the digital economy of Malaysia contribute 17.8% to the country’s GDP of approximately $ 296.3 billion. The MDEC has set a target of 18.2% for the year 2020. Yasmin went on to mention that it is possible for the country’s digital economy ecosystem to achieve 20% of the GDP by the end of the decade at its current rate.

Finding a Beachhead

Malaysia is proceeding with its initiatives for FinTech to leave a mark in the ASEAN region that is characterized by cut-throat competition. The month of August in the previous year saw the bitcoin-based remittance platform called Bitspark Ltd partner with Malaysia’s Vitaxel to offer remittance solutions with regard to the bitcoin blockchain for enterprises and businesses.

Sometime later in the month December, a steering committee was established by the Malaysian non-profit Blockchain Embassy Asia. It was aimed at sensitizing organizations about the technical and legal implications as well as possibilities that are associated with blockchain technology.

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