Currency Act 2020
The Currency Act 2020 came into force on 1 October 2020. It seeks to provide for the management of currency of Malaysia, the regulation of currency processing business, currency processing activities and related matters.
Based on the Currency Act 2020, the following should be noted:
- only Bank Negara Malaysia can issue currency or any other instrument as legal tender.
- a legal tender limit for coins is set at 25 pieces. Recipients may refuse to accept payment if it is made using more than 25 pieces of coins of any denomination.
- a registration regime will be introduced to regulate currency processors. Standards on currency processing will be imposed on them to ensure high quality and integrity of currency in circulation.
- no person is permitted to melt coins with the intention to gain profit.
The Minister of Finance also issued the Currency (Processing Fees for Application of Registration of Currency Processing Business) Regulations 2020, which came into force on 1 October 2020 as well. Pursuant to these regulations, a processing fee of RM500 is payable for an application for registration to carry on a currency processing business.
Central Bank of Malaysia (Amendment) Act 2020
With the Currency Act 2020 coming into force, the Central Bank of Malaysia (Amendment) Act 2020 also came into force on the same day.
As set out in legal alert for March 2020, the substantive changes introduced by the Central Bank of Malaysia (Amendment) Act 2020 include:
- removal of provisions relating to the right of Bank Negara Malaysia to issue currency, legal tender, and the right to call in currency, all of which have been provided for in the Currency Act 2020; and
- adding a provision to clarify that the powers of Bank Negara Malaysia under the Currency Act 2020 are in addition to the powers granted under the Central Bank of Malaysia Act 2009, and not in derogation of them