BUSINESS

LUNO BULLISH ON DIGITAL ASSETS POTENTIAL IN MALAYSIA

15/06/2021 05:19 PM

KUALA LUMPUR, June 15 -- Cryptocurrency exchange Luno Malaysia is bullish on the potential of digital assets in Malaysia considering the increasing demand for the asset day by day.

Country manager Aaron Tang said it is promising to see Malaysians getting involved in cryptocurrency, indicating a positive trend in demand in the country.

“In 2020, we saw 70,000 customers signing up to the platform while just a few months into 2021 or in the past six months, we also regularly see thousands of customers signing up on a daily basis.

“This huge demand shows that the digital assets industry is going to stay and continue to grow,” he said in a virtual media session today.

To-date, Luno Malaysia has signed up over 300,000 customers with digital assets under custody of over RM1 billion since its establishment in the country in 2019, comprising four approved cryptocurrencies, namely Bitcoin (62 per cent), Ethereum (23 per cent), Ripple (10 per cent), and Litecoin (five per cent).

Tang said the company recorded up to RM15 million in daily transactions with a total transaction of RM800 million on its platform last year.

The majority use of Bitcoin or other cryptocurrencies currently is for investment, whereby people buy and invest hoping to get some gains from it.

“The use of the digital assets for payment method is still very low, hence, will take a longer time to happen.

“We need a higher adoption percentage from the population, for it to stabilise and be less volatile to become widely used. It is not that it is not useful today, it is just a stage potentially happening in the future,” he said.

He said although about 2.5 per cent of Bitcoin is being used globally as a means of payment, the traditional way for a new payment method to come into the ecosystem is that it needs to reach over 20 per cent usage to become more useful and widespread.

Meanwhile, at the webinar, Tang said new investors found it difficult to understand Bitcoin due to common myths and persistent misconceptions, such as being too late to buy Bitcoin, cannot take it seriously due to its wild volatility, has no intrinsic value, has a detrimental impact on the environment, and are used by criminals.

“As with any new area of investment, cryptocurrency has prompted many questions from potential investors."

He said as a leading digital asset exchange with eight million global customers, Luno is committed to educating the public about cryptocurrency so that they are well equipped with the necessary knowledge to explore.

“Ultimately, we want to make cryptocurrency accessible to everyone as we believe it has the potential to revolutionise the way the world views and uses money,” he said.

He said Bitcoin is still a young technology, having been around for just over 12 years with much potential for the future with real value that can be seen in global adoption over time and in emerging use cases whether as a payment method, a store of value, or a hedge against inflation.

Tang said Bitcoin’s price is driven by demand especially in the short term, therefore, subjected to volatility based on market sentiment but in the longer term, the price of Bitcoin has historically increased due to its continued adoption and belief in its value.

He said Bitcoin’s fixed supply of 21 million coins also attributed value in the sense that scarce assets tend to appreciate over time as demand goes up.

“In the past year, we have seen the price skyrocketing and its market cap cross a major milestone, surpassing US$1 trillion (US$1=RM4.11) in February 2021.

“With over 100 million wallets with active balances globally, it is clear that many individuals and corporations are viewing Bitcoin as a credible innovation,” he said.

On top of that, he said currently, 39 per cent of Bitcoin mining is performed with renewable energy (RE) and 76 per cent of miners used renewables as part of their energy mix, far more than in other industries, because RE is currently cheaper than non-RE.

He said Bitcoin has the potential to replace and combine many existing financial systems that could help to reduce global carbon emissions and as it gets more energy efficient over time, Bitcoin has a valuable role to play in the future of RE usage.

On misconception that Bitcoin is mostly used by criminals, he said in 2020, the criminal share of all cryptocurrency activity was just 0.34 per cent which is much less than fiat currency.

-- BERNAMA

 

 


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