KUALA LUMPUR: Labuan International Business and Financial Centre’s (Labuan IBFC) “digital family” continues to grow in recognition of the progressive approach the centre has taken in embracing the digital revolution, Labuan Financial Services Authority (Labuan FSA) director-general Danial Mah Abdullah said on Dec 12.
It realises this by being as facilitative as possible to enable innovative digital business to take root in Labuan, said he told the inaugural Connecting Digital Ecosystems in Asia 2019 (CoDE Asia 2019) conference here.
“To this extent, the centre has used legacy licences like for money broker and credit token to provide the regulatory umbrella for the digital business to be carried out. Now that is innovation by itself.
“Hence, the centre has a ‘toolbox’ of solutions to meet the needs of the rapidly expanding digital industry, whether from the supply or demand side,” he added.
Mah noted that as the digital business model must be legitimate as well as meet international standards of compliance, transparency and prudential requirements, applicants would need to obtain Labuan FSA’s prior approval for any proposed digital business if the activities fall within the ambit of Labuan Financial Services Securities Act 2010 or Labuan Islamic Financial Services Securities Act 2010.
Labuan IBFC’s digital journey began in 2017 with eight licences up to 2018, and 2019 has seen an exponential growth in the number of players in the centre with more than 30 licences approved to operate as digital entities.
These businesses range from financial services such as digital banking and insurtech to digital intermediaries such as robo-advisory, digital asset exchanges, crypto trading platforms, blockchain tokens as well as e-payment systems.
“Our bespoke and curated approach is an ideal match to the demands of a fast-evolving digital marketplace,” said Farah Jaafar-Crossby, CEO of Labuan IBFC Inc, the jurisdiction’s market development agency.
She added Labuan IBFC’s tax neutrality and currency agnosticism adds to the appeal as a digital hub, especially since the digital marketplace is inherently borderless in its application.
“We have seen a significant increase in interest of our digital ‘toolbox’ from regional and also international entities,” she said and cited memorandums of understanding signed between Labuan IBFC and China Construction Bank, Labuan as well as Huobi Group of China, both in relation to the advancement and development of Labuan IBFC’s digital ecosystem,” she said.
According to Farah, the fast-growing ecosystem in the jurisdiction has also prompted the establishment of an industry-led Labuan Fintech Association, which is open to any party interested in participating and contributing to Labuan IBFC’s growing digital family.
Labuan IBFC, which will celebrate its 30th year of establishment in 2020, is home to more than 6,000 active companies which include top-ranked financial institutions comprising 55 banks, 217 insurance companies, 61 corporate service providers, more than 300 leasing companies and 43 commodity trading companies.
Labuan IBFC entities employ more than 6,000 people, making the IBFC the largest employer compared to other industries in Labuan.
The CoDE Asia 2019 conference was attended by more than 250 delegates and featured a lineup of regional industry players and subject matter experts, discussing topics catered towards developing a holistic digital ecosystem in the region. – Bernama
