A quick look into the cryptocurrency horizon in Malaysia. 

Cryptocurrencies have been a polarizing subject among investors. You have, on the one hand, those who swear by it and, on the other, investors who resist it like the plague. Nevertheless, some of the most cutting-edge technologies such as insurtech, crowdfunding sites, digital banks, and yes, cryptocurrencies have paved the way for the rise of digital transformation throughout global industries.

Cryptocurrencies, initially conceived as an efficient tool to aid cross-border transactions, have gained popularity among investors as an alternative asset class. 

Digital asset markets haven’t fully matured yet

Compared to more developed markets in various parts of the world, digital assets are still considered a niche in Malaysia. Aaron Tang, Luno’s country manager, claims that Malaysia’s cryptocurrency is rising rapidly. Millions of Ringgit from the ‘early adopter’ Malaysians are exchanged daily. That being said, more than 98% of Malaysians have probably not yet had their first taste of cryptocurrencies.

Awareness is high

Even though the market hasn’t reached its full potential, awareness levels are quite high among urban populations. A survey was conducted by OECD (by the Organisation for Economic Co-operation and Development) which concluded that many people in Malaysia had good foundational knowledge on crypto assets. 

80% of respondents stated that they were aware of crypto options. The level of awareness in Malaysia was slightly higher than in the Philippines, indicating that the nation is quite ahead of several Southeast Asian neighbours. These kinds of statistics can help when trying to understand the behavior of regular investors in Malaysia.

Up to twice as likely to deal in digital credits are new businesses. Some big firms, such as Microsoft and Subway, embrace Bitcoin as payment, among others. Similarly, in Malaysia, some shops are open to the concept of accepting cryptocurrencies as a form of payment.

The Shell petrol station at Jalan Raja Chulan, Kuala Lumpur, for example, is Malaysia’s first petrol station to embrace Bitcoin. The first company in Malaysia to embrace Bitcoin, in March 2013, was Boleh VPN, a VPN service provider. Greekzen also offers premium advanced items for Bitcoin.

Malaysia is home to several key players

Not many know this, but many world-class cryptocurrency businesses, including businesses such as Etherscan and CoinGecko, are also located in Malaysia. Globally, with governments and major institutions jumping into the game, there continues to be massive interest in cryptocurrencies.

Although Etherscan and CoinGecko aren’t really crypto exchanges, both exist in the crypto ecosystem, and investors worldwide are widely receptive.

Is cryptocurrency legal in Malaysia?

Digital currency isn’t really recognized as legal tender in Malaysia. However, that doesn’t mean it is illegal. ‘Legal tender’ just applies to the currency used for the official means of payment. The U.S. dollar is, for example, not recognised in Malaysia as a legal tender. But it does not mean that if your store accepts it, you will not use the currency.

The Malaysian government has also declared that there will be no ban on cryptocurrencies.

The latest regulations require the Securities Commission to seek approval for any digital asset offering. To comply with counter-terrorism financing as well as anti-money laundering laws, such offerings are also required. Any known trader seeking to circumvent the law will be subject to a fine of up to US$ 2.4 million (RM10 million) or up to 10 years in gaol. The central bank of the country and the Securities Commission have said that the new rules are intended to help protect the investments of investors and establish fair trade.

Regulations are improving

Datuk Syed Zaid, Chairman of the Securities Commission, said that key issues facing digital currency regulations have been resolved by the regulator in a principled manner. He reported that the regulator has agreed that digital currencies and tokens are appropriate for trading and investment in registered digital asset exchanges. Currently, the commission has approved the operation of three digital asset exchanges (including Tokenize, SINEGY and Luno) in the country.

SINEGY is the very first crypto-exchange licenced by the securities regulator of Malaysia. As more than 60 per cent of Malaysians are Muslims, the founder of SINEGY, Kelvyn Chuah, considered the announcement extremely important. He said that the statement cleared up many digital asset-related ambiguities. Chuah is thrilled with the announcement the country has made. He revealed that the goal of Malaysia is to become the Islamic Fintech as well as Finance centre.

People can now search for information and learn how to exchange Bitcoin and other cryptocurrencies in Malaysia via various platforms available online with an ever-growing cryptocurrency community. Cryptocurrency investments, like every other investment, are risky. So, for a strong trading plan, investors ought to prepare themselves.

 

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