PETALING JAYA: Luno Malaysia is looking to expand its offerings in 2021 with the introduction of new cryptocurrencies and a savings wallet that allows its customers to accrue interest, similar to the feature that has been introduced in its operations overseas.
According to the digital assets exchange’s country manager Aaron Tang, the platform is working with the Securities Commission Malaysia (SC) to obtain approval for the new coins and features.
For the savings wallet feature that Luno hopes to introduce in the domestic market, he said the interest would be generated from the Bitcoin pledged by its customers in their wallet.
“This will then be lent out by Genesis to institutional clients and the interest generated from the loans will be distributed to its customers,” Tang told the media at Luno’s one-year retrospective virtual briefing on Tuesday.
Genesis is one of the largest institutional lenders of Bitcoin which is also a Digital Currency Group-owned company that had acquired Luno in September.
As for the coins that the platform would like to introduce in 2021, the digital assets exchange chose to remain mum over the specifics.
Tang said it has firm criteria for the coins it lists, and such coins require approval from the SC to ensure that investors would not be exposed to a cryptocurrency with too much risk.
When asked on the exchange’s interest in stablecoins, cryptocurrencies that are linked to the value of currency, such as the US dollar-linked USDT (USD Tether) and USDC (USD Coin), he pointed out that such coins have gained significant traction and popularity in the crypto industry, making up a significant portion of the market.
“We see huge demand here in Malaysia, based on the queries of our customers and looking at the unregulated platforms in the country, all of them have stablecoins and a lot of them are trading stablecoins.”
Tang said the platform definitely wants to explore stablecoins with the SC, which will possibly require the involvement of Bank Negara Malaysia as the cryptocurrency’s value is linked to foreign currencies.
“Definitely, this is something that we are very interested to explore with the regulators in Malaysia as there is high demand for stablecoins,” he said.
Tang said that since its relaunch in October 2019, after being granted the first approval to operate a digital assets exchange in Malaysia, Luno has garnered over 90% of the share of the local market with over 180,000 users, RM827 million processed and storing over RM165 million cryptocurrency for its customers.
This is a surge from its initial target to onboard 40,000-50,000 users that was made at the start of the year.
In the past year, the platform has introduced Litecoin and Ripple to its initial offerings of Bitcoin and Ethereum.
Luno Malaysia disclosed that its customers mainly regard crypto as an alternative investment vehicle to diversify their portfolios, with over 68% of its users and the majority of its users between 30 and 49 years old.
On the e-commerce front, there has been some significant development in the crypto industry as PayPal adopted Bitcoin last October and this was followed by its CEO Dan Schulman’s observation on Monday that Bitcoin is a good tool for e-commerce.
Looking at the data available, Tang said, the adoption for such a use is still early as reflected by the use of the platform mainly for investing and trading.
“I think this is because cryptocurrency asset prices are still volatile. For e-commerce it still needs a some time as it needs a couple of years before we see cryptocurrencies being widely used for small micro purchases, in my opinion.”