What are cryptocurrencies?
A cryptocurrency is a form of digital currency that is created using cryptographic techniques. You’ve probably heard of Bitcoin, the most well-known cryptocurrency in the world right now.
Blockchain is the technology that allows bitcoins and other forms of cryptocurrency to exist. Consider a blockchain to be a decentralised ledger that is shared across multiple computers. Each cryptocurrency transaction is registered in a data ‘block,’ which is linked to other data ‘blocks’ in a ‘chain.’
Bitcoin and similar digital currencies are decentralised, unlike traditional currencies such as the Malaysian Ringgit. This means they aren’t governed by a single authority. Control is instead spread through a vast network of computers.
Is Cryptocurrency Legal in Malaysia?
Malaysia does not recognise digital currencies as legal tender. This does not, however, imply that they are illegal. The term “legal tender” simply refers to currency that is accepted as a form of official payment. In Malaysia, for example, US dollars are not recognised as legal tender, but that doesn’t mean you can’t use your Benjamins if your store accepts them.
Cryptocurrencies will not be banned in Malaysia, according to the government. Last year, the Ministry of Finance said, “It is not the aim of the authorities to ban or put a stop to any innovation that is considered to be beneficial to the public.”
With that said, the Malaysian government does control digital asset exchanges – i.e., platforms that enable you to trade Bitcoin and other digital currencies – and any digital asset exchange that wishes to operate in Malaysia must adhere to a set of regulations issued by the Malaysian Securities Commissions (SC). These rules demand that exchanges have strong safeguards in place to protect users and their properties.
How to buy cryptocurrencies safely in Malaysia?
In general, there are three methods for obtaining cryptocurrency. It can be purchased, mined, or earned through the sale of goods or services. The simplest method is to purchase from a cryptocurrency exchange.
Technically, you don’t need an exchange to buy cryptocurrency if you’re able to find someone who has Bitcoin (or your preferred cryptocurrency), settle on a price, and then have them submit it to your wallet (software that allows you to store Bitcoin). Buying from an exchange makes the process easier. It connects buyers and sellers and provides you with a wallet so you don’t have to keep track of your own.
The three registered DAX operators are Luno Malaysia, SINEGY Technologies (M) Sdn Bhd, Tokenize Technology (M) Sdn Bhd, which had complied with the regulatory requirements within the nine months period given by SC.
Buying cryptocurrency from the above three exchanges are safe and regulated by Securities Commission of Malaysia.