There has been a sharp increase in crypto trading in Malaysia amidst the lockdown. Economists estimate the Malaysian economy is losing $550 million daily due to the lockdown. Meanwhile, licensed crypto exchanges in the country are reporting huge surges in trading volumes.
Growth in Trading Volumes and Users
As the economic effects of the lockdown in Malaysia are being felt, citizens in the nation are turning to crypto trading. The growth of Malaysia’s crypto sector by the number of users and trading volume was revealed by two licensed crypto exchanges in the country. According to a local media report, Luno, the first crypto exchange in Malaysia to receive a license, had seen a growth of 33% in trading volumes in the past month. Besides that, the exchange had seen a huge growth in the number of active users.
According to Aaron Tang, the manager of Luno, the surge was most likely caused by a belief by Malaysians that crypto, especially BTC, was a good store of value. Some experts believe that the huge injections of cash into major economies could cause runaway global inflation and an economic crisis.
Tokenize Technology, another licensed crypto exchange in Malaysia, has also reported a surge in the number of new users signing up. According to Hong Qi, the CEO of the exchange, the average daily trading volume had increased by 30% to 40%. He added that most Malaysians were using the wait and see approach. According to him, only 2% of Malaysians have sufficient knowledge of the crypto sector.
Crypto Regulation in Malaysia
Crypto regulation in Malaysia came into effect on January 15, 2019. All crypto trading falls under the jurisdiction of the Malaysian Securities Commission. Thus far, the commission has approved three crypto exchanges in the country. However, one of the exchanges is still awaiting final approval. The second crypto exchange to be licensed, Tokenize Technology, received its license at the start of April 2020.
Once crypto regulation went into effect on January 15, 2019, the securities commission directed that all crypto exchanges cease operations in the country. The order included all crypto exchanges that had been operating in the country in the transitional period. Besides that, the crypto exchanges were required to submit any assets and monies they had collected from crypto investors.
While Malaysia has good laws in place for the crypto sector, the rate at which it is approving new exchanges is quite slow. Thus far, only two crypto exchanges have received the go-ahead to operate in the country. However, that might change as new crypto exchanges learn from the experience of crypto exchanges that have been approved.
Digesting Malaysia and Crypto
The unprecedented printing on money that various major economies are undertaking is no doubt going to have an impact on the global economy. The collapse of the global economy around 2008 was what led to the launch of crypto. While the crypto sector is not mature enough to act as an effective hedge against the coming global recession, it is great to know that this time, unlike in the previous global recession, ordinary people have an extra tool in their arsenal to safeguard their wealth. Robert Kiyosaki, a famous financial self-help author, recently expressed similar sentiments via a Tweet.
Image Source: Pixabay