Stone Bridge Ventures Joseph Kiss discusses how interested Malaysian investors can add cryptocurrencies like Bitcoin to their portfolio. It’s no secret that Malaysia has a complex relationship with cryptocurrencies, particularly since the Deputy Finance Minister said that the country wouldn’t be accepting Bitcoin as a legal tender.
This happened back in March after Parliament members put in a proposal to accept the reigning cryptocurrency Bitcoin as legal tender in the country. The Deputy Finance Minister cited price volatility and susceptibility to cybersecurity risks as the reason for rejecting the proposal.
But even if it’s not legal tender, it doesn’t mean that investors can’t purchase it for their portfolios. In fact, Malaysia’s Securities Commission has handpicked and registered specific crypto exchanges to operate in the country. One of these is Luno, which is Malaysia’s most popular digital asset exchange serving millions of users.
Then, there’s Sinegy, which has a local team and has acquired approval from the Securities Commission. There’s also Tokenize Exchange, which is based in Singapore but has received approval from the SC.
Different Ways To Purchase Cryptocurrencies in Malaysia
When it comes to purchasing cryptocurrency tokens, there are three ways to do so: via licensed crypto exchanges, P2P platforms, and Bitcoin ATMs. Out of all these options, experts mostly recommend choosing a registered crypto exchange.
These are platforms that allow users to make a deposit in local currency, i.e., Malaysian Ringgit, which they can then convert into cryptocurrencies. To operate in the country legally, these exchanges need a license from Malaysia’s Securities Commission.
In 2019, the SC started regulating digital asset exchanges, and by June, it had approved 3 companies: Luno, Sinegy, and Tokenize. Prior to the issuance of licenses by the Securities Commission, there were around 56 exchanges that had registered as reporting organizations with the central bank, Bank Negara Malaysia.
Securities Commission Regulates Crypto Exchanges
Since then, the SC has acted as the leading regulatory body and reduced the list from over 50 to three approved exchanges. The reason for their approval is that they’ve gone through an extensive screening process, which requires them to comply with different rules and regulations.
As of now, crypto exchanges only have permission to trade the most popular options, Bitcoin, Ethereum, and XRP.
Besides registered exchanges, the other option for investors is to purchase tokens through the P2P marketplace. For this, there are various platforms already available, most of which have some type of scoring system for users. Using these systems, buyers, and sellers can look at feedback before trading. Although P2P platforms provide escrow services to protect buyers and sellers involved in transactions, there are risks involved.
Joseph Kiss of Stone Bridge Ventures recommends that investors be careful while using a P2P platform while purchasing cryptocurrencies. That’s because there’s a higher risk of fraud and other illegal activities. Not to mention, since there are registered exchanges available, using P2P platforms is no longer recommended. The last option involves using a Bitcoin ATM, but they come with drawbacks like high transaction fees, which make it impractical for bigger transactions.
