Malaysians warm up to cryptocurrencies

PETALING JAYA: Investors in Malaysia are increasingly turning to digital currencies as an investment alternative.

Unlike other freely tradable assets such as stocks and bonds, cryptocurrencies are said to offer an opportunity for investors to engage in less risky and more profitable investments.

China, South Korea and Japan have adopted use of bitcoins with regulations, but the Malaysian authorities have so far remained silent on the subject of bitcoin and digital currency regulation.

Bitcoin startup, Luno, has said it continues to stay in regular contact with Bank Negara Malaysia (BNM). Mriganka Pattnaik, Countries Associate at Luno, said his company has delivered numerous training sessions and workshops on the subject.

"BNM has done a great job so far in taking the initiative to learn more about the [Bitcoin] industry and stop/prevent scams," Pattnaik was quoted by Bitcoin Magazine as saying.

"With regards to policy, (regulating bitcoin is) not a very easy thing to do. I can't comment on when or how BNM will regulate the industry, but they are always in touch with us about this and we are more than happy to provide them with input."

As part of a trend that signals rising awareness and adoption of alternative cryptocurrencies, 47.4% of Malaysian cryptocurrency investors have bought bitcoins and other "altcoins," against 52.6% who have only bought bitcoins.

Among the most popular altcoins, ether, the native cryptocurrency of the Ethereum network, is the top winner with 56.4% of altcoin investors having bought the asset. Litecoin (7.4%), Ripple (6.5%) and Dogecoin (6.5%) also rank among the most sought-after coins.

"We've done this survey in a few other countries as well, so a lot of trends were similar across countries. Most of the results point to the fact that bitcoin adoption and usage is increasing everywhere," Pattnaik said.

Luno, which offers storage, exchange and transaction services, operates across Southeast Asia, as well as in Nigeria, South Africa and the UK. Among the main reasons for buying bitcoins, Malaysian investors cited investment (44.7%) as the key motivation, followed by speed, affordability and convenience (16.3%), and trading/speculation (15.1%).

In Malaysia, a major drawback to bitcoin adoption is the lack of regulation surrounding digital currencies. Nearly 90% of investors said they would buy more bitcoins if the government passed some sort of laws around it, indicating that "regulation, when it arrives, will be a major boost for bitcoin and ensure that bitcoin trading reaches a new high", said Pattnaik.

The company said it has over 100,000 verified customers in Malaysia.