The government is looking at formulating a policy on digital finance, which could eventually see cryptocurrency and blockchain technology recognised in Malaysia.

Prime Minister Datuk Seri Anwar Ibrahim said he had discussed with the Abu Dhabi government and cryptocurrency and blockchain technology giant Binance to study how to move forward with the idea.

“We have talked about digital transformation, data centres and artificial intelligence (AI). We now face demands which require us to think about making significant changes.

“I had lengthy discussions with the Abu Dhabi leadership and Changpeng Zhao, co-founder of the world’s largest cryptocurrency platform Binance.

“I proposed several months ago how our agencies, including security, treasury and Bank Negara study how Malaysia can explore this so we aren’t left behind. Ensuring that is regulated could safeguard the people’s interests and prevent leakages,” he told Malaysian media at the end of his three-day official visit to Abu Dhabi today.

Anwar said he would be consulting the cabinet on the move.

“However, this innovation is just like AI, which would revamp the financial world. We should not sit idly by and wait and later be forced to do so after others have done it already,” he said.

He cited the example of the United Arab Emirates, which is now a leader in the field.

“They (UAE leaders) feel that they can forge a close cooperation with Malaysia on this issue. We need to discuss this in detail, leave behind the old business model and give meaning to this digital finance policy.

“We have discussed at length about fintech. But when something new comes about, we get agitated.

“I hope we can be more open to this. I am leaning towards not just approving but also expediting this,” he said.

He said Malaysia would not be starting from scratch but would rely on the experiences of others including Binance and the UAE.

“This is an evolution which happens quickly and requires us to be equally fast. We feel that Malaysia should not be left behind while mired in an old financial system,” he said.

Asked when this policy would take place, he said it would require comprehensive studies from the Treasury, the Securities Commission and Bank Negara Malaysia.

“As with all new ideas raised, there will be some concerns. We have to train our personnel, develop competency, and get the players to participate.

“What is pertinent is that we have excellent relations with the UAE. We told them that we would move on this on the condition that we work as partners to ensure that things are on track.

“This will be a radical departure from the old ways.”

Anwar said a paper on the issue would be drafted and presented to the cabinet for endorsement as soon as possible.

Source : NST

Malaysia Should Adopt Bitcoin As National Stockpile Reserve Asset

If capitalising on high tech trends is how Malaysia becomes a cash cow, saving the proceeds in an inflation-resistant asset is how it protects it.

In this regard, one of the more innovative strategies for Malaysia could be the adoption of bitcoin as a reserve asset. As global debt levels rise and traditional fiat currencies face inflationary pressures, Bitcoin presents an alternative that could help Malaysia hedge against currency devaluation and diversify its reserves.

Bitcoin, with its fixed supply of 21 million coins, is often touted as “digital gold.” Unlike fiat currencies, which can be printed in unlimited quantities, bitcoin’s scarcity could make it a valuable asset in times of economic uncertainty. By allocating a portion of its reserves to bitcoin, Malaysia could benefit from the potential appreciation of this digital asset, thus strengthening its overall reserve position.

Furthermore, the adoption of bitcoin could signal Malaysia’s forward-thinking approach to financial innovation, potentially attracting tech-savvy investors and positioning the country as a leader in the digital economy. Countries like El Salvador have already made moves in this direction, and while Malaysia’s economy is much larger and more complex, a cautious and well-regulated adoption of Bitcoin could provide significant benefits.

However, it’s important to note that adopting bitcoin as a reserve asset comes with its risks, given its volatility. Therefore, any decision to include bitcoin in Malaysia’s reserves should be part of a broader, well-considered strategy that includes comprehensive risk management.

Malaysia’s RM1.5 trillion debt is indeed a ticking time bomb, but it is not without solutions. Through a combination of fiscal consolidation and reform, becoming a tech powerhouse and the strategic adoption of Bitcoin as a reserve asset, Malaysia can effectively manage its debt crisis and safeguard its economic future.

Bitcoin is the most important conversation we’re not having

If you’re a retiree concerned about your pension, or a middle-class person worried about your savings and the rising cost of living, this topic has an impact on you.

If you’re a working-class person in the lower income group and concerned about building a better future for your children, or a fresh graduate or undergraduate worried about your future prospects in the economy, this topic, too, has an impact on you.

Yet, there has been a severe lack of the necessary coverage, discussion and attention on this topic.

I am referring to the very thing that humanity has accepted as money.

But what is money?

Why do we use what we do now as money and how will the global civilisation look like if we didn’t use it?

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Ultimately, why should one even care?

What if I told you that if we agree to use what I want us to use as money, I can steal anything of value or productivity you may generate without touching a single cent in your digital or physical wallet?

What if I told you I can also enrich someone close to me and impoverish those who disagree with me?

What if I told you the root cause of every problem the world faces today comes down to our collective lack of understanding of the concept of money and what we have all agreed (willingly or otherwise) to use as money?

How would all this make you feel?

Have you ever wondered who decides how much your money is worth? And how much control they have over it?

Ultimately, what if I also tell you that there may potentially be a solution to all these problems but it requires active participation, public scrutiny and transparency?

At the 2024 Nashville Bitcoin Conference (now president-elect) Donald Trump announced plans to create a “strategic national bitcoin stockpile” and a “bitcoin and crypto advisory council” and turn the US into the “crypto capital of the world”.

At the same conference, senator Cynthia Lummis also announced that “over five years, the US will assemble a million bitcoin”.

Trump also said that “there will never be a CBDC (central bank digital currency) while I am president of the US”.

Why?

Why does it seem (to me, at least) like there is a race among global central banks together with the Bank for International Settlements to develop their own CBDC?

Why do BRICS member countries want to set up an alternative settlement currency to replace the US dollar?

In my view, the real world war being waged now is over who will define and determine the new global unit of account – the standard used to measure the value of everything we buy and use.

I would also argue then that if a new unit of account that is centralised, based on debt (riba or usury) and lacks public scrutiny, is globally adopted it could usher in a new era of tyranny and digital dystopia unlike anything we’ve seen in recorded history.

It will enable those who control it unlimited hold over anyone and anything that adopts it.

Dystopian concepts like forced spending, restricted fungibility and social credits (to name but a few) will be commonplace, and that will have an impact on the very fabric of our collective and fundamental human rights.

Imagine your ability to spend money on certain goods were restricted based on personal data or social behaviour ratings, or if access to basic needs was tied to conformity with arbitrary rules.

Through a digitalised debt-based unit of account, those who control it will be able to transfer (steal) the purchasing power from one group and give it to whomever they choose.

This transfer of wealth through inflation of the money supply can be done at a scale beyond what we currently experience and in a much more targeted way.

Without public scrutiny and transparency, decisions can be made and rules can be written without the best interest of the people being taken into account.

Instead, a new unit of account for global adoption must be decentralised in such a way that no single actor or entity can impose undue influence over its network and rules.

For example, a decentralised unit of account – like bitcoin – is governed not by any single entity but by the collective agreement of its users.

Its rules are transparent and immutable, ensuring that no one can manipulate its value for personal gain.

Additionally, a new unit of account has to be resistant to the possibility of value dilution through inflation of the underlying money supply.

This would insulate those who adopt it from having their purchasing power eroded over time.

Further, one has to be given the choice to opt in rather than forced to adopt this account.

As a cautionary note, we must also have additional firewalls to protect the privacy of users from excessive financial surveillance that can have a negative impact on their fundamental human rights.

At the end of the day, the burden and responsibility of this decision and outcome is upon our collective shoulders.

How we choose to act today will have an impact on countless generations to come.

The choice of what we ultimately use as money is far from trivial. It shapes the very balance of power in society.

Will we ignore this critical decision and risk our fundamental freedoms and rights?

Or will we selflessly face it head-on for the benefit of future generations?

More States, Countries Consider Adding BTC to Their Coffers

There is a growing trend making its way around the world: countries, states and companies are all racing to catch up with it – Bitcoin reserves.

Russia Joins Brazil in National Adoption Efforts

One of the biggest developments in recent times is, of course, that the United States could be adding BTC to its reserves. While President-elect Donald Trump has voiced his support, it’s not clear if this will be easy to actually implement.

Other countries have moved at a faster pace, with Brazil recently introducing a bill that could see the establishment of a sovereign Bitcoin reserve called Sovereign Strategic Bitcoin Reserve (RESBit).

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Brazil, with high crypto adoption rates and a large population, is a promising candidate. Another is Russia.

RIA Novosti reports that Anton Tkachev, a State Duma member (the lower house of the Russian parliament), has just submitted a formal appeal to create a Bitcoin reserve. The proposal to Finance Minister Anton Siluanov comes as Russia continues to grapple with international sanctions.

In conditions where access to traditional international payment systems is limited for countries under sanctions, cryptocurrencies become practically the only tool for international trade. The Central Bank of Russia is already preparing to launch an experiment on cross-border payments in cryptocurrency.

Florida, China, Who’s Next?

Not quite a nation-state, but a large US state nevertheless, Florida is said to be joining the illustrious group of governments holding Bitcoin. According to the Florida Blockchain Business Association (FBBA), the Sunshine State is working towards a 2025 implementation.

FBBA President Samuel Armes commented on the importance of investing even small amounts in BTC, acknowledging that pension funds already hold crypto:

Florida would join fellow US state Pennsylvania, which is working on a Strategic Bitcoin Reserve Act.

There are also cities working on adding just a little speck of Bitcoin magic to their town’s portfolio. CNA recently reported that the Canadian city of Vancouver and the Swiss canton Bern are gearing up to stack sats.

And even China may be looking to get in on the action. Changpeng “CZ” Zhao, founder and former Binance CEO, believes there’s a strong case for China to follow the US’s lead.

Speaking at the Bitcoin MENA conference in Abu Dhabi, 9 December, CZ said it’s “inevitable” China will eventually establish a reserve, because Bitcoin is “the only ‘hard’ asset”.

Bursa Malaysia’s Barring Bitcoin & Other Crypto Assets May Well Go Down As A Historic Blunder – Bitcoin USD 3.5 Trillion Market Cap Is 9 Times Bigger Than Entire Bursa Saham At USD $397.39 Billion

Let’s look at Bursa Malaysia CEO Muhamad Umar Swift’s reasons for this stance and why I think Bursa is potentially squandering a generational opportunity.

Opportunity and value

Reason 1: Bursa’s goals revolve around creating opportunities and growing value, and cryptocurrency does neither.

Counter argument: Bitcoin, the first and largest cryptocurrency in the world, has a market capitalisation of a whopping US$1.37 trillion (RM6.5 trillion). A single bitcoin was worth around RM320,000 on April 14 and it has gone up against the ringgit by about 23,000% since its inception in 2008.

Bitcoin is now the six largest asset in the world by market capitalisation, larger even than Meta (formerly Facebook) and within striking distance of Google.

Despite ongoing skepticism about Bitcoin’s utility and value in 2024, it has risen to become the 6th largest monetary asset globally, surpassing the British pound and trailing only gold, the US dollar, the euro, the yuan, and the yen.

Bitcoin is also 65 times larger than Maybank, the most valuable publicly listed Malaysian company. If this doesn’t count as “growing value”, I don’t know what does.

Bitcoin hits $2 trillion market cap, now bigger than Tesla, Facebook and Saudi Aramco.

Bitcoin’s market cap now surpasses the GDPs of Mexico ($1.85 trillion), Australia ($1.8 trillion), and Spain ($1.73 trillion), and is just $0.15 trillion shy of Russia’s GDP ($2.18 trillion), Brazil’s ($2.19 trillion), and Canada’s ($2.21 trillion). Earlier, Bitcoin also surpassed the market valuations of Saudi Aramco ($1.796 trillion), Silver ($1.791 trillion), Facebook ($1.549 trillion), and Elon Musk-led Tesla ($1.148 trillion).

In addition, it is estimated that bitcoin has created around 40,000 millionaires (denominated in US dollar). If we include the cryptocurrency industry in general, this number balloons to around 88,000. If this doesn’t count as “creating opportunities”, I don’t know what does.

Plus, asserting that cryptocurrencies don’t create opportunities and grow value is especially jarring when we consider that the first asset Bursa included in its newly introduced multi-asset exchange was gold.

Sure, gold is a decent store of value but it has performed abysmally against bitcoin, depreciating against it by almost 99% just in the past 10 years, as shown below:

Surely if gold is an acceptable investment tool, an asset that has vastly outperformed the precious metal should be as well?

Asset value

Reason 2: Cryptocurrency is not a real asset, it does not have any intrinsic value.

Counter argument: Let’s examine the case for bitcoin first. Like fiat currencies such as the ringgit and dollar, Bitcoin has no intrinsic value.

Fiat currencies have value because governments dictate that they do and this edict is defended by men with guns.

Bitcoin, however, doesn’t depend on such coercion. Rather, it has value because people believe it has value due to it possessing these qualities and more:

1) Hard supply cap of 21 million coins, making it an inflation-resistant store of value;

2) Can be transacted with by anyone from anywhere in the world, making it censorship-resistant;

3) The network has never been hacked, making it a secure bank in cyberspace, and

4) Can’t be controlled or co-opted by anyone or any entity, making it nation-state-resistant.

Further, bitcoin derives value by upending the currently fractured financial system and providing a unified solution.

It is a bearer asset (supplanting gold), it is a currency (supplanting fiat currencies), it is a bank in cyberspace (supplanting commercial banks), it provides a predictable, rules-based monetary order (supplanting central banks), allows cross-border transfers (supplanting the inter-bank Swift system), and allows real-time payments via L2s (supplanting the Visa and Mastercard networks).

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And when it comes to smart contract-based cryptocurrencies — Ethereum and Solana being the most popular ones — their value can be ascertained the way the values of conventional companies are.

The major difference between them and a conventional company is that instead of providing a suite of products or services, these crypto networks provide a base substrate or platform that other crypto protocols can use to create value.

Just last year, Ethereum surpassed US$10 billion in revenue, achieving this feat faster than tech heavyweights Meta, Zoom, Microsoft and Shopify, as shown below:

Solana, a younger, faster and lower-cost crypto protocol, has generated US$134 million in fees just this past year, while regularly hitting more than a million active users daily.

With such metrics pointing to their adoption, how can anyone say that cryptocurrencies have no value?

Economic benefits

Reason 3: All our products come back into the economy. I do not have that call for crypto. Crypto is just crypto.

Counter argument: Many crypto protocols have real-world use-cases and come back into the economy. Let’s look at some of them.

1) Bitcoin is a hedge against the ceaseless debasement of the ringgit. It can protect ordinary, hardworking Malaysians from having their life savings wiped out due to central bank money printing.

This increase in wealth could enable Malaysians to upgrade their standard of living if they choose to by purchasing more real-world items, hence boosting the economy.

2) Helium is a pioneer of a newly budding field in crypto called Decentralised Physical Infrastructure (DePIn).

It launched an Uber affordable phone plan which only costs US$20 a month per user, undercutting plans offered by major US mobile carriers such as Verizon and AT&T.

It bootstrapped the buildout of the network by selling “hotspot miners” which enabled buyers to earn a reward in its token.

3) Render Network is the world’s first decentralised graphic processing unit (GPU) rendering platform. It has created a blockchain-based marketplace where users can utilise idle GPU capacity to serve their AI and rendering needs from anywhere in the world at a fraction of the cost of conventional methods.

4) Farcaster is a new decentralised, censorship-resistant, peer-to-peer social network that feels like a hybrid between X (formerly Twitter) and Reddit. It boasts 80,000 daily active users and just raised a new funding round, valuing it at US$1 billion.

5) Hivemapper sells dashcams that contributors install on their cars to provide it with the freshest maps of the road. In return for providing this map data, contributors get paid in the Hivemapper network’s native token.

Hivemapper then sells this map data to companies that need up-to-date images and maps of the world. Its almost 120,000 contributors have helped it map 10.3 million unique kilometres all over the world.

6) Tether, the world’s largest stablecoin issuer is now worth north of US$100 billion (more than four times larger than Maybank) and made US$6.2 billion last year — more than Goldman Sachs and Blackrock.

Tether is now a top 22 buyer of US treasuries — whose use is to fund US government operations.

Raising capital, making profits

Reason 4: Bursa’s purpose is to help companies raise capital, expand, employ people and make profit. Crypto does not do that, it does not fulfil that basic premise. It is trading for the sake of trading.

Counter argument: As amply demonstrated above, there are plenty of real crypto companies that are raising capital, expanding, employing people and making profit.

And this is just the tip of the iceberg. There are many more crypto companies that are making a lot of money.

Sure, there are plenty of cryptocurrencies that serve no other purpose than to gamble and speculate on — memecoins being the primary ones — but to say cryptocurrencies as an asset class are just “trading for the sake of trading” is straight-up erroneous.

Closing thoughts

Bursa has a golden opportunity here. By allowing people to invest in the most popular cryptocurrencies such as bitcoin, Ethereum and Solana directly in the Bursa multi-asset exchange, they will attract an immense pool of liquidity that will be domiciled in Malaysia, and be part of Malaysia’s capital market.

Its popularity is clearly demonstrated by the fact that the newly launched bitcoin ETFs (exchange-traded funds) in the US — spearheaded by financial behemoths Blackrock (US$10.5 trillion assets under management) and Fidelity (US$4.5 trillion assets under management) — have become the fastest growing ETFs of all time, giving them custody over US$57 billion.

Other major economies are following suit on the back of its incredible popularity. Hong Kong is likely to approve its bitcoin and Ethereum ETFs this month and South Korea’s newly elected government has vowed to allow citizens access to the US bitcoin ETFs.

But since none of the exchanges in Southeast Asia have made such a move, Bursa can become a pioneer in the region by allowing access to bitcoin and other cryptocurrencies.

After all, it’s about time Malaysia stopped being a follower and started becoming a leader.

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