This article first appeared in Wealth, The Edge Malaysia Weekly on August 28, 2023 - September 3, 2023

Investor interest in digital assets or cryptocurrencies has surged in recent years, especially among the younger generation. New accounts registered with Luno, a licensed digital asset exchange (DAX), have surpassed the number of newly registered Central Depository System (CDS) accounts under Bursa Malaysia in the past two years.

According to Luno, the largest DAX locally which is said to command 90% of the retail market share, it registered 420,000 new accounts in 2021 compared with 344,542 newly registered CDS accounts under Bursa. The year after, it had about 200,000 new accounts versus Bursa’s 168,696.

As at July this year, Luno had 840,000 Malaysian customers and processed more than 73 million transactions in Bitcoin. “It makes up for around 18% of total transactions processed globally [by Luno] in the past decade,” says Aaron Tang, its Asia-Pacific manager.

During Luno’s 10-year anniversary event held at the Common Ground, 1 Powerhouse, in Bandar Utama, Selangor, Tang provided more details of the profile of its clients.

He said the average age of its Malaysian customers is 34 years and they typically work in the construction sector. Many of them are engineers and take on the sales role in a company. Their favourite cryptocurrencies are Bitcoin, Ethereum and Ripple.

Interestingly, the number of women investors trading cryptocurrencies is on the rise locally. Some 23% of Luno’s users (193,200) are female — 4% higher than the average of its global businesses in various countries.

Scarlett Chai, the newly appointed Malaysia country manager of Luno, attributes the firm’s achievements to investors’ trust and regulation. She says investors are increasingly putting money into digital assets as the industry is now better regulated, a result of the active collaboration and engagement between industry players and the regulator.

“It is important for us to collaborate with regulators such as the Securities Commission Malaysia (SC) to build trust and confidence [among investors] while ensuring that compliance measures do not inhibit innovation.

“Despite the world currently undergoing a tough macroeconomic climate, Luno managed to grow its customer base while nurturing positive shifts in investors’ mindsets as they adopt a longer-term perspective towards crypto investment,” she says.

Moving forward, Luno plans to onboard more users and list more cryptocurrencies on its platform to further grow its business.

During a panel discussion session at Luno’s 10th anniversary event, Chai mentioned the Malaysian Digital Asset Platform Association (MDAPA), which is still in the planning stage.

The association will see representatives from all local DAXs coming together to discuss and address industry challenges. “In the long term, we need to be more united in terms of voicing out issues and challenges that are relevant to the industry.

“The formation of MDAPA is still new … we are still setting up everything. However, it is a good start as we can collectively contribute ideas, vision and future endeavours to the industry and move forward together.”

Other panellists at the session included CoinGecko head of research Chan Zong Yang and Jirnexu (the company behind financial comparison website RinggitPlus) founder and director Liew Ooi Hann. The moderator was Michelle Chin, co-founder of digital pet insurance provider Oyen Insurance and women-focused personal finance platform Her Duit.

For context, Luno is the first regulated DAX under the SC that provides easy access to 10 cryptocurrencies, namely Bitcoin, Cardano, Avalanche, Bitcoin Cash, Ethereum, Chainlink, Litecoin, Solana, Uniswap and Ripple.

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