Cryptocurrency is the new hype in the modern financial world. Some embrace the concept, some just getting the hang of it and some others are still in the dark. Well, in this article I would like to take you through the role of Cryptocurrency in Malaysia. We will discuss whether it is legal or accepted in that territory. First, let us see what ‘Cryptocurrency’ is all about. To give you some examples, Bitcoin is the most popular Cryptocurrency. Lite coin, Ethereum, Ripple are some other cryptocurrencies to name a few.
Before we get into Cryptocurrency in Malaysia, let us see in brief, what a cryptocurrency is.
What is Cryptocurrency?
Cryptocurrency is a mode of exchange that takes place on the Internet. It uses cryptographical functions to monitor transactions. ‘Cryptography’ using secret codes and puzzles to secure transactions. Only the people involved in the transaction will understand the message/password. To others, it may look like nonsense.
Cryptocurrency is not controlled by a centralized financial Authority. It is decentralized. Instead, Cryptocurrency uses blockchain technology to carry out tasks.
Is Cryptocurrency in use in Malaysia?
According to the BNM (Bank Negara Malaysia), Cryptocurrency is not legal in Malaysia. Yet, as cryptocurrency transactions happen through the Internet, Malaysian use this mode. There are strict rules for Initial Coin Offering. All the offerings must follow laws & regulations of the Securities Commission-Malaysia. Thus, cryptocurrency in Malaysia is a grey area. But we see the potential for Bitcoin in the near future.
How to buy Cryptocurrency in Malaysia?
We will speak specifically about Bitcoin as it is the most popular in the country. Buying Cryptocurrency in Malaysia is not a difficult task. You can buy them from a Currency broker, OR you can visit a Cryptocurrency exchange to buy.
The following are the trading amounts for some Cryptocurrency in Malaysia:
- BTC: 31,009.6 MYR
- ELF: 0.2140 MYR
- ADX: 0.2946 MYR
- AE: 0.5597 MYR
To buy a currency such as Bitcoin, you must first create a ‘Bitcoin Wallet’.
Here are the steps to buying Cryptocurrency in Malaysia:
- The first step in buying Cryptocurrency is to register yourself in an exchange such as Coin Hako or Coin mama etc.
- You must then enable two-factor authentication for added security.
- Verification of your account
- Deposit desired amount of Malaysian Ringgit to buy cryptocurrency
- The amount requested will be transferred to your account
- Buy desired Cryptocurrency. You can enter the amount of BTC you want to buy or the amount of MYR you want to spend
- Review your transaction details
- Confirm purchase.
You can use the following payment methods to buy Cryptocurrency in Malaysia.
- Credit card
- Debit Card
- Bank Transfers
- Using another crypto
- Buy crypto anonymously
Advantages of cryptocurrency
While cryptocurrency has many advantages such as,
Ease of use
All you need to open a bitcoin account is a computer and a secured internet connection. Where you can register by providing basic personal details. In some cases, you will need to scan your National Id and send it across. You can create an online wallet and use it whenever & wherever you want. In a traditional Bank, you will need to produce several documents to open an account.
Cryptocurrency is decentralized. Centralized authorities, cannot dictate terms for its users. Also, if one computer goes offline still it will not hinder your transaction. Because the transaction can still take place with existing computers (nodes)
- Cryptocurrency can be used internationally
- Operation cost is low as there are no bank fees involved
- You can perform unlimited transactions
- Transparency, high security are some of the many other benefits cryptocurrency offers.
Why is it that the Malaysian government lacking the confidence in legalizing cryptocurrency. If we are to go in-depth into the disadvantages of cryptocurrency, we just might have the answer to that.
Disadvantages of cryptocurrency
The most significant con or disadvantage of cryptocurrency is that the value of cryptocurrency fluctuates constantly. It is hard to trust the currency because you may never know what happens in the future. If the value increases, it would benefit users. But what if the value plummets? This poses many difficulties for users and merchants to accept crypto as a currency.
Due to the trust issue, there is a lack of merchants who accept digital money. Everyone expects a good return on their Investment. If the prices of crypto keep fluctuating it is a risk to invest in them.
The other reason is the lack of knowledge about cryptocurrency. Let us face it. Cryptocurrency is indeed a foreign concept to most of us. Even the history of cryptocurrency remains a mystery to us. The first founder/ founders of the Bitcoin go as “Satoshi Nakamoto”. We are yet to determine whether it was a person or a group.
Storing of Cryptocurrency is tricky. If you happen to lose your password you are unable to retrieve. If you lose your coins, you will not be able to recover them.
Many Governments are cautious against Cryptocurrency. Malaysian Government treads cautiously in this area. Here are the reasons we think about why.
- Cryptocurrency transactions can be done anonymously. This gives way to web criminals to evade taxes and get into illegal money laundering.
- Cryptocurrency has a decentralized control system. This lessens or eliminates all control of the government. The wide use of Crypto makes it difficult for authorities to gather economic data.
- Loss, Theft & Fraud is common.
We do see that Pros outweigh the cons when considering things. Even though Cryptocurrency is widely used in countries like the USA & China, certain countries lag. But we can be sure that Malaysia is positive about embracing Cryptocurrency culture. It will impose certain laws and regulations to ensure the safety of its citizens’ financial security. Currently, Malaysia is discussing Muslim Cryptocurrency. The discussion took place in The Kuala Lampur summit 2019. Qatar, Iran, Malaysia, Turkey & Indonesia were participating countries.
Cryptocurrency is a subject that needs in-depth understanding. We at S & F consulting can help you understand the concept. We can also discuss Cryptocurrency as an Investment opportunity for you. All you have to do is contact us.