What are the rules and regulations for Digital Gold in Malaysia?

 

What is “Digital Gold”

By “digital gold” I mean investment products or platforms that allow you to buy‑digitally (fractional or full) gold exposure, backed by physical gold in a vault or bar, with or without the possibility to redeem or convert to physical gold. Could be via e‑wallets, fintech apps, banks, Islamic banking products, etc.

In Malaysia, there are several offerings: e.g. e‑Mas via TNG eWallet, Bank Rakyat’s eGold Account‑i, Maybank’s MIGA‑i product etc. 

Regulatory Framework Relevant to Digital Gold in Malaysia

Although “digital gold” per se is not always explicitly covered by a single law, several laws/regulations apply depending on how the product is structured. Below are the main regulatory pieces relevant, and how they might apply.

Regulatory / Legal Regime	What It Covers / Its Role	How It Could Apply to Digital Gold Products
Capital Markets & Services Act 2007 (CMSA 2007)	The primary statute governing capital markets in Malaysia. Deals with securities, digital tokens, digital currencies (where prescribed), licensing, prospectus requirements etc.	If a digital gold token or investment behaves like a security (e.g. tokenised gold with promises of return, etc.), it may be regulated under CMSA. Issuers/platforms may need a licence from the Securities Commission (SC).
Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 (“Prescription Order 2019”)	Declares that certain digital currencies and digital tokens (that meet the stipulated criteria) are prescribed as securities.	A digital gold product that qualifies under the criteria (token, expectation of return etc.) may be “prescribed as securities.” That means SC oversight, registration/licensing, ongoing disclosure etc.
Guidelines on Digital Assets (SC Malaysia)	Guidelines issued to regulate digital asset offerings, IEO platforms, digital asset custodians, etc.	A digital gold product might have to comply with these guidelines if it involves token offerings, custody of digital asset tokens, and if the product is structured such that the “digital gold” is a digital token “custodied” on behalf of users.
Prescribed Requirements for Platforms & Exchanges	Digital asset exchanges, initial exchange offering (IEO) operators, custodians must be licensed, follow AML/CFT rules, ensure transparency, maintain records, etc.	A digital gold provider that allows trading of digital gold tokens, or acts as a custodian, will need to meet those platform or custodial requirements.
Role of Bank Negara Malaysia (BNM)	While SC handles securities aspects, BNM handles payment systems, currency regulation, financial stability etc. Digital currencies with payment function may fall under BNM’s domain. Digital gold products that facilitate “payments” or are offered like currency might draw BNM scrutiny.
Shariah / Islamic Finance Regulations	Many Malaysians prefer Shariah‑compliant instruments. There are products that are designed to be Shariah compliant (e.g. eGold Account‑i, gold account‑i, etc.) with specific purity, certification, and rights of ownership features. The SC’s Shariah Advisory Council gives guidance.

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What the Rules Imply / What Providers Must Do

If you are launching or using a digital gold product in Malaysia, here are the key regulatory implications to check or fulfill:

1. Determine whether the digital gold product counts as a “digital token” or “digital currency” under the Prescription Order, and whether it is prescribed as securities. If yes, SC licensing, prospectus or offering registration, ongoing disclosure apply.

2. Compliance with the SC Guidelines on Digital Assets: This includes requirements for IEOs (if fundraising), custody (if holding digital tokens for users), and platform operators. Security, audit, transparency are important.

3. AML / KYC / CFT obligations: Providers must ensure they have robust KYC (know your customer) and anti‑money laundering / counter‑terror finance procedures.

4. Purity and authenticity of physical gold backing: If the digital gold is claimed to be physically backed, there should be credible vaults, purity certifications (e.g. LBMA‑certified gold), audit of reserves, clear disclosure about how redemption converts to physical gold, whether that is allowed, fees, minimum weight etc.

5. Shariah Compliance if targeting Islamic investors: If marketed as Shariah‑compliant, must meet standards (purity, ownership, rights, contract structure etc.), with oversight by a Shariah advisory council or equivalent.

6. Disclosure to users / investors: Terms of redemption, whether physical gold delivery is possible (or only cash), fees (storage, premiums, commissions), spread (buy vs sell price), and any limitations.

7. No assumption of legal tender or payment functionality: Digital gold is not legal tender in Malaysia. It can’t be assumed you can use “digital gold tokens” as a currency in payment systems. SC and BNM have made this clear. 

8. Taxation: Gains from trading or profit made may be subject to income tax or other tax laws; physical gold investments may have different tax treatment. GST is abolished; so purchases may not attract GST if structured appropriately. 

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Examples of Digital Gold Products & Their Regulatory Features

• TNG eWallet’s e‑Mas: Lets Malaysians invest in digital gold from as little as RM10. At the time of its launch, it was digital‑gold only; not yet Shariah‑compliant because of lack of full physical allocation. 

• Bank Rakyat’s eGold Account‑i: A Shariah‑compliant gold investment solution, purity 999.9, can convert into physical gold bars. 

• Maybank’s MIGA‑i (Gold Account): Purity certified, regulated, allows buy / sell / transfer; has features for Shariah‑compliant gold account. 

These service offerings show how providers try to align with regulation, especially around purity, physical backing, audit, convertible physical delivery, and Shariah compliance.

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What Is Not Clear / Gaps & Risks

Since digital gold is relatively new, there are still gaps and regulatory uncertainties. Key things to watch out for:

• There is no regulation specifically labelled “digital gold law.” Many obligations come from adjacent areas (tokens, securities, digital assets). So products may operate differently depending on how they are structured.

• Whether all digital gold platforms allow redemption for physical gold, and under what terms. Sometimes it's digital only. Users must check.

• The standardisation/audit frequency of physical gold backing: not all providers may publish regular independent audits.

• Pricing spreads, premiums, storage fees, delivery costs when redeeming—those costs may be significant or opaque.

• Shariah­compliance for digital gold is important for many in Malaysia; some products are compliant, others not, depending on how ownership, custody, and rethe physical backing are handled.

• Regulatory enforcement: making sure platforms are fully licensed, dealing with unauthorized operators, consumer protection issues if a provider fails.

• Tax clarity: while GST is abolished for many gold transactions, the tax on gains, reporting requirements etc. may still have grey zones depending on whether you are an investor or a business, whether the gold product is physical or digital, and whether the product is structured like a token with expectation of profit vs just “store of value.”