There are offshore financial centres and there are onshore financial centres. And there is the Labuan International Business and Financial Centre (IBFC) in eastern Malaysia, which styles itself as a “midshore” financial centre. The neologism is well-chosen, for the IBFC enjoys a special status within Malaysia. It has its own regulator, its own legal system, its own exchange, and it is not subject to the exchange controls that govern capital flows into and out of the mother country. Since its foundation in 1990, the IBFC has attracted more than 900 businesses, mostly drawn from the wealth management, funds and insurance industries. But it is now home to crypto-currency exchanges and tokenisation entrepreneurs, and is fast-becoming an important digital financial centre even without resort to the usual regulatory “sandbox.” Nor is there a financial centre anywhere in the world whose leadership is more convinced that an international financial centre can contradict the cynics and use digital finance to increase financial inclusion. Dominic Hobson, co-founder of the Future of Finance, spoke to Farah Jaafar, chief executive of the IBFC.
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