PETALING JAYA: Research consulting providers agency Oppotus Research Group Sdn Bhd has revealed that 36% of Malaysians owned cryptocurrencies as of the fourth quarter of 2022. The determine was 20% in the identical interval in 2021.
The Securities Commission Malaysia additionally reported a considerable adoption of cryptocurrency in 2021, with some RM21 billion in digital belongings equivalent to Bitcoin and Ethereum, tokens, domains and digital artwork traded within the nation.
Given this situation, an instructional has expressed “concern” over the rising recognition of cryptocurrencies within the nation, warning that it might hinder Bank Negara Malaysia’s (BNM) capability to control the availability of cash.
Universiti Teknologi Mara senior economics lecturer Dr Mohamad Idham Md Razak mentioned the problem for BNM arises from the decentralised nature of cryptocurrencies.
“They function exterior the regulatory framework utilized to conventional fiat currencies such because the ringgit, US greenback and British pound.”
Fiat currencies should not backed by bodily commodities equivalent to gold or silver, however by the governments that issued them.
“Consequently, central banks have much less authority over the creation and circulation of cryptocurrencies,” he mentioned.
Mohamad Idham mentioned the inherent volatility of cryptocurrencies can introduce instability into the monetary system, making it extra unpredictable.
He mentioned the volatility in cryptocurrency costs might result in monetary turbulence, making it difficult for companies to plan and make investments successfully.
Additionally, he mentioned BNM’s capability to regulate inflation could also be threatened by the rising use of cryptocurrencies.
“Unlike standard fiat currencies, cryptocurrencies don’t adhere to the identical financial coverage instruments. This probably limits BNM’s management over inflation charges.
“These causes suggest that cryptocurrencies may not help environment friendly financial coverage and inflation administration,” he mentioned.
Mohamad Idham emphasised that given these multifaceted dangers and challenges, it’s paramount for people and companies to remain nicely knowledgeable when coping with cryptocurrencies.
He added that policymakers and regulators ought to actively have interaction in addressing these challenges, recognising the evolving nature of the cryptocurrency panorama.
“Although BNM remains to be engaged on it, creating a radical and dependable regulatory framework is a troublesome job that might take a very long time.
“It requires cautious consideration of the distinctive traits and potential influence of cryptocurrencies in addition to the event of insurance policies that strike a steadiness between fostering innovation and making certain monetary stability and shopper safety,” he mentioned.
However, Sunway University economics professor Dr Yeah Kim Leng believes cryptocurrencies can function a verify towards detrimental authorities insurance policies and mismanagement that result in inflation and forex crises, providing potential financial advantages.
“In such conditions, folks typically flip to different belongings or mediums of trade. Hence, cryptocurrencies provide a viable choice.
“Cryptocurrencies have been related to points like ‘darkish cash’ and cash laundering, however they’ve additionally developed as different currencies when dealing with financial sanctions or hyperinflation.
“Being decentralised and immune to conventional monetary constraints, cryptocurrencies can provide stability and accessibility, making them a invaluable monetary device in occasions of financial turmoil,” he mentioned.
Yeah pressured that it’s essential to acknowledge that cryptocurrencies stay extremely unstable.
Therefore, any motion taken by people comes with inherent dangers, with restricted assurance of recovering funds in case of unexpected issues.
Cryptocurrency investor Ong Poh Chean mentioned he finds cryptocurrencies interesting as they provide a comparatively accessible studying curve for individuals who are devoted and keen to commit.
“Considering that no funding is totally risk-free, it’s essential to guage and handle this whereas making cryptocurrency investments.
“One approach to mitigate the dangers is by conducting thorough analysis, staying knowledgeable in regards to the newest information and developments within the cryptocurrency area, and punctiliously evaluating the events concerned in varied initiatives.
“These pre-emptive steps can enormously decrease potential drawbacks and enhance resolution making, whereas the inherent danger nonetheless exists,” he mentioned.
