The Development of Malaysia’s Digital Assets Market

Blockchain technology has given the world access to a digitally-distributed ledger system that has been made to be difficult to breach. By recording the origin of digital assets, this emerging technology underpins their production and execution.

Blockchain-powered digital assets are being provided and exchanged on a variety of platforms, and as more investors and companies show enthusiasm for the market, countries around the world are being encouraged to regulate the sale and trading of digital assets. The Securities Commission Malaysia (SC) regulates the issuance and trading of digital assets as commodities in the country.

Malaysia’s Digital Asset Regulation

Malaysia's digital asset industry is well-regulated, with the goal of promoting ethical development in the digital asset field while also protecting investors' rights, according to the Securities Commission Malaysia (SC). MX Global Sdn Bhd, SINEGY DAX Sdn Bhd, Luno Malaysia Sdn Bhd, and Tokenize Technology (M) Sdn Bhd are the four authorized digital asset exchange (DAX) providers as of December 2022.

Malaysia's regulated digital market is comparatively small, with an estimated trading activity of less than 1% of the trading volume on Bursa Malaysia, or 16 million Malaysian ringgit daily. SC recommended investors to use a regulated market to safeguard their investments.

Digital Assets Market’s Increasing Value

Despite the uncertainty of the market which was followed by the pandemic, Malaysia's digital asset sector grew in 2021, with around 21 billion Malaysian ringgit in digital assets exchanged across the four regulated digital asset exchanges.

According to the SC, investor interest increased the overall number of investment accounts by nearly 300 percent, from more than 190,000 in 2020 to around 760,000 today. "Investors under the age of 35 represented the largest category at 62%, with over 470,000 accounts as of end-2021," the SC stated in its Annual Report 2021, which was released in March 2022. With the adoption of Bitcoin Cash (BCH) as an added acceptable digital asset in March 2021, the commission proceeded to promote new digital assets on DAXs.

Despite the volatility of the market, digital assets continue to be attractive to consumers. This alternative to financial services is enjoying an increase in uptake, and Malaysia is setting the standard for regulating the market. The emergence of the digital assets market of Malaysia is something to be closely watched and to be improved.