Cryptocurrencies: A risky gamble or a lucrative opportunity?
KUALA LUMPUR - Sumber aset digital terkenal know sebagai cryptocurrency, membawa peningkatan perhatian global, termasuk negara kita, Malaysia.
This currency system uses cryptographic and blockchain technologies to secure transactions, operating outside the control or management of any bank or government.
In this century, the rise of cryptocurrencies is viewed as a substitute for conventional currencies in terms of transactions or investments, perceived to be safer, more transparent and irreversible.
It is reported that by 2024, a total of approximately 562 million people around the globe are expected to be using cryptocurrency, based on a projection by financial technology firm Triple-A, contrasting with an estimated 420 million users in 2023.
The website also lists the UAE, Singapore and Turkiye among the top 30 economies with the highest crypto currency ownership rate. At the same time, Asia holds the top spot with a substantial 326.8 million owners, closely followed by North America with a total of 72.2 million.
Despite the promising potential of cryptocurrencies to revolutionise the financial sector, investments and commerce, fears about their risks are still prevalent, especially with the rise of deception in the digital world.
FRAUD
The deputy president of the Malaysia Cyber Consumer Association, Azrul Zafri Azmi, revealed that the global cryptocurrency market is now worth over USD2 trillion. He pointed out that the two most widely traded cryptocurrencies, Bitcoin and Ethereum, together account for more than 60 percent of this substantial value.
He pointed out that Bitcoin's price has grown from US$0.08 in 2010 to a peak of over US$60,000, and as of early December 2024, its value had exceeded US$100,000.
According to recent police data, a total of more than 4,000 cases of cryptocurrency-related scams have been reported in Malaysia over the past five years, resulting in estimated losses of over RM200 million.
"There will be a three times rise in cryptocurrency scam cases between 2020 and 2023," he informed Bernama recently.
Individuals new to cryptocurrencies often lack understanding and knowledge, making them more vulnerable to investment schemes that promise unusually high rewards.
The challenge of monitoring transactions also contributes to the likelihood of fraud or scams because blockchain technology does not keep a record of the identities involved, making it difficult to detect any discrepancies.
"This allows scammers to withdraw their money undetected. The use of unauthorised platforms that promise higher returns than licensed platforms worsens the problem," he pointed out.
Among the registered Digital Asset Exchange (DAX) operators in Malaysia are MX Global Sdn Bhd, SINEGY DAX Sdn Bhd, Luno Malaysia Sdn Bhd and Tokenize Technology (M) Sdn Bhd respectively.
He also stated that DAX acts as an electronic platform for trading digital assets, giving investors the opportunity to trade approved digital currencies like Bitcoin, Ether, Ripple, Litecoin, and Bitcoin Cash.
UNDERSTAND FUNDAMENTALS
A typical cryptocurrency scam is characterised by the promise of high returns within a short period, accentuated by the urgency to invest immediately with statements like "promotion will end soon" and the lack of transparency regarding the investment company's background and credentials.
Azrul Zafri advises users to safeguard themselves against fraud by opting for registered platforms and confirming the legitimacy of the investment company or platform.
Do your research to verify the credibility and reputation of these platforms. Be cautious of platforms that are similar to Ponzi schemes or multi-level marketing scams which typically need others to sign up as investors to generate income.
Masyarakat disaran untuk menggunakan pengesahan dua faktor sebagai langkah tambahan untuk memprentahkan akses yang tidak sah ke akaun mereka,” katanya, menambahkan peningkatan kesedaran awam, khususnya mengenai asas-asas cryptocurrency, menjadi kunci untuk mengurangkan penipuan.
He stated that digital cryptocurrencies are indeed genuine digital currencies with considerable potential to propel economic growth and facilitate technological advancements, therefore it is crucial for users to maintain awareness and conduct thorough investigations prior to investing, and to inform the relevant authorities about any fraudulent practices encountered.
He mentioned that MCCA is prepared to work with the Securities Commission of Malaysia (SC), the Central Bank of Malaysia (BNM) and the police to conduct awareness campaigns on this issue.
"Stronger ties between users, the government and authorities such as MCCA can help ensure a safer and more sustainable cryptocurrency environment in Malaysia," he said.
RAPID DEVELOPMENT
Meanwhile, the School of Multimedia Technology and Communication's Dean at Universiti Utara Malaysia, Associate Professor Dr Mohd Khairie Ahmad, stated that, based on Statista's report, a global data and business analytics platform, the anticipated value of Malaysia's cryptocurrency market for 2024 is projected at US$306 million.
In Southeast Asia, Malaysia and Singapore have emerged as the regions with the most dynamic growth in cryptocurrency usage, he noted.
In 2024, approximately 4.6 million Malaysians are expected to be cryptocurrency users. Given that nearly nine out of ten Malaysians have access to the internet and over 75% of the population has a basic understanding of digital technology, this is not a surprising outcome. The government's 2021-launched Malaysia Digital Economy Blueprint has recognised the rising trend towards cryptocurrencies as well.
Mohd Khairie pointed out that comprehension of the core principles of cryptocurrency, including blockchain, types of cryptocurrencies, the system's functionality and its security features, is crucial in preventing users from being misled by online deception, particularly schemes connected to money laundering.
It is crucial to learn and comprehend the existing legal framework and regulations surrounding cryptocurrencies, given that the rule-making process for this digital financial system is still evolving.
"The possession of adequate knowledge and skills in identifying cryptocurrency trends or patterns is equally essential for prudent investing and deciding on one's investment strategy," at the very least," emphasized. "Seeking professional advice should thus be prioritized, especially by individuals who wish to experiment with this currency system,” he added.
Mohd Khairie holds the belief that cryptocurrency is not only a means for investing, but also for executing everyday transactions, similar to e-wallets. According to him, cryptocurrencies' lesser bureaucratic pathways and their independence from global currency backing make them more stable, even with their fluctuations.
According to him, its greater acceptance in Malaysia will only be possible if it has a stable and solid legal framework.
Till today, the management of cryptocurrency still lacks openness and uniformity because BNM has yet to acknowledge it as an official trading medium, he expressed. Furthermore, he said, the reception of cryptocurrency in Malaysia is largely influenced by the ecosystem fostered by the authorities.
BOOST FINTECH
The Dean of Finance at Prince Sultan University in Saudi Arabia, Professor Nadisah Zakaria, a lecturer at the university's College of Business in Riyadh, mentioned that cryptocurrencies can bring financial services to the rural community which has no access to traditional banking.
She stated that Malaysia's trade-oriented status benefits from cryptocurrencies as it allows for quicker and more affordable cross-border transactions, reducing reliance on conventional remittance methods with their high transaction fees.
"Undi Semi-pedas" and "Bertimbang Pendapat" is also a common feature in political and social sphere today not just in Malaysia but also other several people all over the globe, have been emphasizing and has made cryptocurrencies possible to be used as one of the 'new assets' for economic diversification and to diversify investment all across the country.
"In addition to that, small to medium-sized enterprises in Malaysia, which constitute a substantial part of the country's economy, can gain benefits from accepting cryptocurrencies as a form of payment. This move will allow them to decrease their reliance on conventional banking systems and also make it easier for them to tap into international markets," she exclaimed.
She pointed out that cryptocurrencies could indeed spur innovation in the field of financial technology (fintech), which could in turn give a boost to Malaysia's digital economy and create new job openings in blockchain development, trading platforms and related services.
Kegasus a discussion among risks, Nadisah stated the main issue is uncertainty in regulations. In line with this, Bank Negara Malaysia (BNM) has already issued guidelines for the use of cryptocurrency, but the absence of a comprehensive regulatory framework can lead to potential misuses, scams, and market instability, she commented.
The same exchange’s speaker also pointed out that cryptocurrencies are characterised by price fluctuations that are quite extreme, which might pose considerable risks for investors, potentially resulting in financial losses for those who are inexperienced in the market.
The pseudo-anonymous nature of cryptocurrencies also raises concerns about their potential use in money laundering, terrorism financing and other illicit activities.
"In contrast to conventional investments, digital currencies like Bitcoin do not provide any protection for investors when issues with exchange mismanagement or fraud occur," Eurostat said.
A study led by Nadisah and her team in 2023, focusing on 'Fintech Adoption in Accounting: A Study of Millennials and Gen-Zs' in Malaysia, discovered that younger Malaysians, mainly those within the age range of 20 to 40, are more familiar with cryptocurrencies due to their frequent usage of social media, their digital-savvy nature and their desire for innovative investment options.
Social media platforms such as X, TikTok, and Telegram are often used for crypto-related discussions and community interactions.
The study's results also highlight growing awareness in urban settings, especially among professionals and entrepreneurs, who are exposed to fintech innovations and investment seminars.
Rif lebuh rantau menyaksikan ciri-ciri yang lebih rendah terdedah kepada mekanisma kriptomena, utamanya disebabkan terhadap penggunaan internet yang terhad, kurang peka kewangan dan kurangnya inisiatif pendidikan yang spesifik.
A large number of Malaysians are familiar with the term Bitcoin or other cryptocurrencies, although many remain unclear about the way these digital currencies work and concepts such as blockchain, mining, and digital wallets.
"In Malaysia, courses related to cryptocurrency and blockchain are being introduced in universities and tech schools, but education in this area is still evolving. Despite some businesses accepting cryptocurrencies, everyday spending using these currencies is not common due to their fluctuating values and limited merchant support," she pointed out, also noting that people's unfamiliarity with basic personal finance concepts can make it difficult to understand cryptocurrency complexities.
Stating that Malaysia's cryptocurrency landscape remains promising and challenging, she said the nation will likely witness a gradual surge in the usage of digital currencies for payments and trading and as an investment class.
Malaysia's e-commerce sector may see an increase in the use of cryptocurrencies as merchants begin to accept crypto payments to appeal to tech-savvy consumers. This, coupled with clearer and more comprehensive regulations from the BNM and SC, will likely promote trust and wider adoption of cryptocurrencies.
She mentioned that clearer regulation could facilitate financial technology companies like fintech to adopt and innovate more freely and systematically.
"Rakyat Malaysia sejak awalnya telah menunjukkan minat dan penerimaan terhadap cryptocurrency, dan sebagai negara yang bertumpu di sektor dagangan dan dalam kerjasama ASEAN/Afrika, mengambil keuntungan dari cryptocurrency untuk pembayaran atau kredit dagangan secara lebih cekap secara antidasar, dapat meningkatkan keunggulan Malaysia di pasaran global, sebagaimana pendatang baru dalam seluruh kawasan ini.” – BERNAMA
