Deputy Governor of Maldives Announces New Regulations for Asset-Backed Digital Money

Ahmed Imad, Deputy Governor of the Maldives Monetary Authority (MMA), has announced that the institution is in the process of drafting regulations for the introduction of Asset-Backed Online Money in the Maldives. Imad made this statement during a panel discussion at the Maldives National University (MNU), highlighting the MMA’s ongoing efforts to modernize the financial system.

As part of these modernization initiatives, Imad pointed to the success of the Maldives Instant Payment System, "Favara," which allows real-time transfers between banks. The system, already connected to several banks, is expected to integrate more financial institutions in the near future, enhancing the country’s digital payment infrastructure.

In response to the increasing global demand for digital currencies, the MMA is collaborating with the Capital Market Development Authority (CMDA) to develop a regulatory framework for Asset-Backed Online Money. This joint effort aims to ensure a robust and secure introduction of this digital currency, which is designed to offer the security of being backed by tangible assets.

While the MMA is focusing on regulated asset-backed digital money, Imad also acknowledged the authority’s position on cryptocurrencies. Although the MMA supports individuals using unbacked cryptocurrencies, these digital currencies are not widely accepted by banks due to their lack of backing by tangible assets or central bank-issued currencies.

The drafting of these new regulations marks a significant step towards digitalizing the financial landscape of the Maldives, positioning the country in line with global financial trends.