KUALA LUMPUR: Malaysia’s institutional investors are eyeing digital assets such as cryptocurrencies, but are holding back until regulators provide clearer rules before committing their investments.
Luno Malaysia country manager Scarlett Chai said the crypto investment platform has yet to see the participation of major institutions such as the Employees Provident Fund or Khazanah Nasional Bhd, unlike what is already happening overseas.
“While they are beginning to show interest, the key question remains around the ‘how’,” she told SunBiz.
For Luno, the Malaysian user base remains predominantly retail with an estimated mix of about 90% retail and 10% institutional.
Chai noted that fund managers are fielding interest from clients who want exposure to digital assets but remain unsure about how to proceed. There are still significant knowledge gaps – many simply don’t know. What they may need is a clear checklist or structured guidance to help them get started,” she said.
The hesitation, she explained, arises from uncertainty around regulatory requirements and tax.
“They need greater clarity – if regulation applies, how it will be implemented; if tax applies, how it will be treated – because professional advice is essential,” she said.
Chai noted that institutions can approach digital assets in two ways. The first is through portfolio exposure, a practice already common overseas, where large investors allocate varying portions of their investments to crypto.
“There are multiple avenues for this – whether through platforms like Luno, licensed fund managers, or brokers,” she said.
The second approach is problem-solving, where blockchain or DeFi is applied to enhance efficiency. She pointed to remittances and supply-chain traceability as examples.
“Blockchain provides far greater transparency, while DeFi offers speed and efficiency – enabling faster transactions and unlocking new opportunities,” Chai said.
Malaysia’s policy direction is encouraging, she added, with the government actively engaging on artificial intelligence and blockchain while drafting a framework to guide adoption. “Policymakers are working to embrace these technologies, to support and encourage organisations to drive greater innovation,.” Chai noted.
She highlighted that Malaysia’s strength in syariah governance distinguishes it within the region and could help institutions build confidence in adopting digital assets.
“What sets us apart is our robust syariah-compliance framework – it is a uniquely Malaysian strength,” Chai said, adding that Malaysia’s syariah scholars are actively working to align their expertise with this emerging asset class.
“The focus is on how syariah principles can be applied, and ultimately moving the conversation beyond simple questions of compliance or permissibility.”
For 2026, Chai said Luno Malaysia will align product expansion and user experience enhancements with regulatory developments. “Revenue growth is certainly a key KPI for us, but our priority is to deliver what customers need.”
The crypto investment platform has expanded its tradable list from three to 22 coins and continues to refine a mobile-first platform with security as a core principle.
“Our customers have long asked for broader offerings, whether through additional coins or new features. We are fully digital-first, and our goal is to ensure the user journey is seamless,” Chai said.
She added that any rollout in 2026 will strike a balance between innovation and user protection, as regulators consider further liberalisation.
“A consultation paper is already under way, with regulators exploring how to ease certain processes. Our product launches will be carefully sequenced to remain in step with policy direction,” Chai said.
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