digital assets: An Emerging Avenue for Investment and Fundraising
Interest in the use of blockchain and in the investment of blockchain-based digital assets has rapidly escalated in recent years, precipitated by the rise of cryptocurrencies (such as Bitcoin and Ethereum) to become one of the most celebrated class of digital assets around the world. Malaysia is no stranger to this phenomenon, as the usage and investment in cryptocurrencies have become popular since Bitcoin’s first bull run in December 2017.
In early April 2021, the total market capitalisation for cryptocurrencies in the world had topped USD2 trillion for the first time.[1] Based on the reports provided by digital asset exchange (“DAX”) operators to Bank Negara Malaysia, Malaysia saw an estimated 450,000 active DAX accounts actively trading in digital assets in 2020. In the same year, transaction values for digital assets trading were approximately RM105 million for the month of August.
Recognising the increasing demand for cryptocurrencies and its untapped potential, most countries have promulgated certain forms of regulations to facilitate and regulate the transactions of these digital assets. Similarly, the Securities Commission Malaysia has taken a phased approach in developing the regulatory framework for digital assets, which will be considered in detail in this and our ensuing Articles.
In this Chapter 1 of our Digital Assets Series, we offer a brief introduction on digital assets and its regulatory framework in Malaysia.