Led by the Innovation Hub's Singapore Centre, Project Dunbar demonstrated that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform. This has the potential to "reduce reliance on intermediaries and, correspondingly, the costs and time taken to process cross-border transactions".

Project Dunbar, which will be led by the Innovation Hub’s Singapore Centre, aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs. The multi-CBDC platforms will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks, eliminating the need for intermediaries and cutting the time and cost of transactions. 

The project will work with multiple partners to develop technical prototypes on different distributed ledger technology platforms. It will also explore different governance and operating designs that would enable central banks to share CBDC infrastructures, benefitting from the collaboration between public and private sector experts in different jurisdictions and areas of operation.  

Project Dunbar will explore the international dimension of CBDC design and support the efforts of the G20 roadmap for enhancing cross-border payments. Its results, expected to be published in early 2022, will inform the development of future platforms for global and regional settlements. 

Under the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019, all digital currencies and digital tokens that satisfy the requirements in the Order are securities for purposes of securities laws.

In line with digital currencies and digital tokens being prescribed as securities, the guidelines set out the requirements on fundraising activity through digital token offering, operationalisation of initial exchange offering (IEO) platform and provision of digital asset custody.

"Notwithstanding anything in these Guidelines, digital currencies and digital tokens are not recognised as a legal tender nor as a form of payment instrument that is regulated by Bank Negara Malaysia," the guidelines said.

The guidelines apply to all:

• issuers seeking to raise funds through digital token offering;
• persons intending to operate an IEO platform; and
• persons intending to provide the services of safekeeping, storing, holding or maintaining custody of digital assets for the account of another person.

A crypto ATM is a machine that allows individuals to buy and/or sell digital assets via cash, debit/credit cards or e-wallets. These machines are installed in various locations in Malaysia, facilitating the exchange of different types of digital assets with fiat currency and vice versa.

The SC said that crypto ATMs are considered to be operating a digital asset exchange (DAX) which require registration with it. In this regard, it said that it had not authorised any entity to operate crypto ATMs.

"As such, we wish to caution and remind members of the public not to deal with unlicensed or unauthorised entities or individuals. Those who do so are not protected under the Malaysian securities laws and are exposed to various risks, including fraud and money laundering," the SC said.