Bitcoin (
BTC
) is the world’s first decentralized cryptocurrency, revolutionizing international buying and trading by transcending borders and eliminating restrictions. However, the methods of acquiring Bitcoin may vary in different countries due to their respective government’s stance on digital currencies. Fortunately, for Malaysian crypto traders, buying Bitcoin is legal in Malaysia, and this article serves as a step-by-step guide to purchasing Bitcoin in the country.
Before delving into the process of buying Bitcoin in Malaysia, it is essential to understand the legal status of Bitcoin in the country. As of April 2024, it is legal to buy Bitcoin in Malaysia, although it is not considered legal tender. While holding and buying Bitcoin is allowed, using cryptocurrency as a payment method at local businesses is prohibited unless explicitly accepted by the business.
To ensure a safe and secure Bitcoin purchase in Malaysia, it is crucial to choose a regulated exchange that complies with the country’s cryptocurrency laws, including Anti-Money Laundering (AML) and Know Your Customer (KYC) policies. This regulation minimizes the risk of theft and scams. Additionally, the Malaysian government classifies Bitcoin as a security, exempting Bitcoin transactions from capital gains tax. However, frequent traders who generate significant profits may be subject to income tax if their earnings are considered their primary income.
To begin the process of buying Bitcoin in Malaysia, prospective buyers must first acquire a crypto wallet. Crypto wallets come in various forms, such as exchange wallets, mobile wallets, and hardware wallets. Exchange wallets, provided by crypto exchanges, are popular among everyday traders due to their constant internet connectivity and easy accessibility. However, they are not immune to the risk of theft and hacking.
Mobile wallets, on the other hand, are tied to a user’s mobile device and offer increased security compared to exchange wallets. However, losing the mobile device or falling victim to external theft poses risks to the wallet’s security. Hardware wallets, considered one of the safest options for long-term Bitcoin holders in Malaysia, provide top-tier security algorithms and operate offline, protecting them from hackers and other threats.
Once a crypto wallet is acquired, there are several methods to buy and store Bitcoin in Malaysia. One option is to use Malaysian fiat-to-crypto exchanges, where users can create an account and purchase Bitcoin using credit/debit cards. Examples of such exchanges include Binance, one of the world’s largest cryptocurrency exchanges, and Luno, Malaysia’s first fully licensed crypto trading platform.
Another convenient option is Bitcoin ATMs, which can be found in local supermarkets or gas stations. These ATMs allow users to convert cash into Bitcoin by scanning a QR code and transferring the funds to their Bitcoin wallet. However, it is important to note that Bitcoin ATMs often charge higher fees compared to other purchase methods.
Peer-to-peer trading, the original purpose of Bitcoin, is also an alternative method of purchasing Bitcoin in Malaysia. This involves directly buying or selling Bitcoin with another individual without involving intermediaries. Platforms like Paxful and Reminato facilitate peer-to-peer Bitcoin trading in Malaysia. Traders can meet in person or use these platforms to transact, funding their wallets through various methods such as bank transfers, credit/debit cards, or gift cards.
When engaging in peer-to-peer trading, buyers have the option to create their own buy offers or browse existing offers. Creating a buy offer involves selecting the purchase method, choosing between market price or fixed price, setting an offer margin, and determining the order’s time limit. Buyers can also customize their offer by setting terms, targeting specific countries, or limiting certain users.
Alternatively, buyers can browse existing sell orders, filtering them based on location and accepted payment methods. Once a suitable sell order is selected, buyers can view the seller’s profile information, margin rate, ID verification, and trade time limit. After confirming the details and amount of Bitcoin they want to purchase, buyers commit to the purchase, and their funds go into escrow. The seller then sends the Bitcoin using the preferred method, and once the transaction is validated by the Bitcoin blockchain, the Bitcoin will appear in the buyer’s wallet.
The future of cryptocurrencies in Malaysia remains uncertain. While there is growing acceptance, the country’s central bank, Bank Negara Malaysia, has not declared cryptocurrencies as legal tender and has warned about potential risks. However, the Securities Commission Malaysia regulates cryptocurrency exchanges, indicating some degree of governmental acknowledgment. The future of cryptocurrency in Malaysia depends on the regulatory environment, which could involve stricter regulations or gradual acceptance with robust consumer protection. Ultimately, the impact of cryptocurrencies on traditional finance and their ability to foster innovation in a regulated setting will shape their role in the Malaysian economy.