How to Gain Exposure to Cryptocurrency in Malaysia

Warning: This article is not intended to provide any buy or sell recommendation on any kind of cryptocurrency, it is not an investment advice.  Security Commission (SC) has warned the public that investment in cryptocurrency poses significant risks to investors (Read more here)! 

On 22 November 2017, Bank Negara Malaysia (BNM) Governor Tan Sri Muhammad Ibrahim said in his keynote address, “Readying the Financial Sector Amid the Evolving War on Terrorism Financing”, that the regulators must prepare themselves as digital currencies will become the new norm.  As such, BNM is developing the regulatory structure for digital currencies and from 2018, persons converting crypto currencies into fiat money currencies will come under anti-money laundering law  (Read more here).

There are many tutorials available on the internet about cryptocurrency, but they might be too complicated for the general public to comprehend.  The easiest way to gain exposure to cryptocurrency is to own some of it.  The most popular cryptocurrency now is Bitcoin, which is currently trading at around RM 35,000 per coin.  But not to worry, you can own a fraction of a Bitcoin, in a Satoshi (unit).  One Satoshi is equivalent to 0.00000001 Bitcoin, the smallest unit of Bitcoin currency.  As such, owning 100,000 Satoshi, or 0.001 Bitcoin cost only about RM 35 (as at 23 November 2017).   

Currently in Malaysia, according to the info in the press link (Read more here), there are 11 platforms providing cryptocurrency buy/ sell services in Ringgit Malaysia.  They are not regulated, yet.  Thus, the risk of theft and fraud may be high.  It was reported that a popular Bitcoin exchange was hacked and USD 30 million worth of Bitcoins were stolen by attackers on 21 November 2017 (Read more here).  If you plan to buy cryptocurrency in large quantities, it is advisable to store them in “Cold wallet” rather than “Hot wallet”.  The topic on cold and hot wallet will be covered in another article, soon!

To test one of the platform stated in the press link above is to buy RM50 worth of Bitcoin.  The entire process may take less than 30 minutes.  The tools you need are:

·        Smart phone (either Android or iOS)

·        Hot or Cold wallet.  (Hot wallet normally is attached to the exchange)

·        Online Banking Giro Account

You may follow the steps below:

1.      Open Google Play or App Store on your phone, download and install your desired Bitcoin exchange app.

2.      Follow the instruction to signup an account.  Remember, STRONG password is important!

3.      Verify your identity.

4.      Enable Two-factor Authentication.

5.      Tap the “Deposit” icon in the apps, then follow the instruction to transfer money from your bank account to the exchange’s account.

6.      Wait about 10 minutes to receive the successful confirmation notice of the transfer from the app.

7.      You can now buy Bitcoin by tapping the “Buy” icon.  Viola!  You now own your first Bitcoin currency!

8.      If you already have a “Cold wallet”, now it is time to transfer your Bitcoin to your cold wallet.  (Bitcoin could be transferred to another third-party wallet and thus the original purchase is legit).

The exchange charged about 3 ~ 4% for the buy transaction.  As such, the Bitcoin you may own is not the full RM 50 but about RM48+.  Also, transferring Bitcoin from the wallet provided by exchange to third-parties’ hot or cold wallet is also chargeable.