Labuan IBFC approves record number of fintech licences in 2020

Labuan International Business and Financial Centre (Labuan IBFC) has announced a record 1H2020 for new Digital Financial Services operators being registered, marking an influx of digital financial service providers revolutionising its financial offerings.

The Malaysian jurisdiction has approved a total of 46 Digital Financial Services operators as at 30 June 2020 including three digital banks, two digital securities exchanges and 19 crypto trading platform providers.

“This segment has grown significantly in the last four years in tandem with our aspirations to have the market embrace digitalisation as the future of conducting business,” said Labuan Financial Services Authority (Labuan FSA) director-general, Datuk Danial Mah Abdullah at the second Connecting Digital Ecosystems Asia (CoDE Asia 2020) today.

Mah added that the “digital family” has grown due to the progressive approach the centre has taken in embracing the digital revolution, by recognising that the nature of all Labuan legacy licences may be structured to be a digital variant for as long as all entry criteria, regulatory requirements and supervisory needs can be met.

“The covid-19 pandemic has also profoundly impacted the international market and businesses. It has forced businesses to pivot as the old ways of doing things will not work anymore. Many organisations have had to digitally transform their operations to meet customer expectations and needs”, Mah said.

Labuan IBFC’s debut as a digital friendly jurisdiction began in 2017 with just one licence and has since expanded with a wide range of digital businesses and players, from digital banking and insurtech to intermediaries such as robo-advisory, digital asset exchanges, crypto trading platforms, tokenization licences and e-payment systems.

Farah Jaafar-Crossby, CEO of Labuan IBFC, the market development arm of the jurisdiction said, “Labuan IBFC offers currency and tax neutrality, as well as proportionality in regulation – these key elements are essential for digital service providers to thrive under their demanding and competitive operational parameters.”

She added that the recently launched digital banking framework by Labuan FSA is an example of the progressive and facilitative stance which prevails in the jurisdiction.