Will Bitcoin Be A Game Changer For Consumers In Malaysia?
When it comes to Bitcoin, there are three groups of people: people who believe in it, people who don’t and people who believe in it until things don’t go according to plan.
Bitcoin is a virtual currency that is unregulated by any central bank or government, but still works for purchasing goods and services from retailers willing to accept it. Bitcoins, which are created when they are “mined” or generated by computers, also trade on an open market that fluctuates much like a stock market.
The bad publicity that Bitcoin has received previously which saw the value of the currency take a sharp plunge (with many investors quickly dropping it) did not deter Arsyan Ismail, the founder of 1337 Tech Sdn Bhd, and an early adopter of Bitcoin in Malaysia from using and advocating the crypto-currency.
“For most people who do not understand how Bitcoin really works and the potential it poses, their first experience with Bitcoin is really important. It forms their expectation of whether it is something they are willing to adopt or invest further in,” said Ismail, on Malaysians and Bitcoin.
The Malaysian invasion
With the first petrol station in Malaysia accepting Bitcoin, it is hard to continue to ignore the fact that it is becoming another valid payment channel.
In March, Singapore-based payment transaction provider Numoni Pte Ltd introduced the first-ever Bitcoin Auto Vending Machines (AVM) in Malaysia in Bangsar Shopping Centre in Kuala Lumpur and Gurney Plaza in Penang to cater to the fast-growing demand for Bitcoin.
Ismail and his team at 1337 Tech have been working to promote the usage of Bitcoin, for users, merchants and also investors through BeliBitcoin.com, a Bitcoin trading platform, BitRinggit.com, a platform to cash out your Bitcoin, BitPos.my, a Point of Sale (POS) system for merchants, and CryptoMarket.my, a marketplace to buy and sell products using Bitcoin.
“To increase the number of merchants accepting Bitcoin, we are currently offering a free tablet for the merchants. The merchants must have Wi-Fi at their shop to be able to do the transaction in Bitcoin,” explained Ismail, adding that he foresees more merchants accepting the currency as a payment option soon.
What’s in it for me?
Why would anyone opt for Bitcoin when they can easily buy something with a credit card? Firstly, there is no interest charges on your purchases. It is like using cash, except that it safer and faster.
“With the crime rate increasing, consumers are feeling less confident about bring too much cash out, and using credit card means incurring interest charges if they missed a payment. Bitcoin becomes the better option, considering those factors,” said Ismail, adding that Bitcoin makes it easier to track one’s expenses as everything is recorded online.
For merchants, why would you not offer as many ways as possible for your customer to pay you? Furthermore, you don’t need to keep too much cash at the shop, with the risk of robbery, this makes accepting Bitcoin a smart move, especially when the merchant is selling big ticket items.
“Once a Bitcoin transaction is done, it cannot be reversed or be stolen. It goes directly to you and you can monitor it while you’re away, perfect for merchant who may not be stationed at the retail store all the time,” added Ismail.
On paper, Bitcoin is the ideal payment option as it does not succumb to currency inflation. No one in this world can print “new” Bitcoin out of the 21 million fixed amount available in the world.
However, as in most parts of the world, Bitcoin is not (yet?) recognised by the central bank. Bank Negara Malaysia released a statement on January 2, 2014, stating that Bitcoin is neither recognised as legal tender in Malaysia nor regulated.
The statement ends with a precaution for the public to be cautious of the risks associated with the usage of the digital currency.
“At the moment, Bitcoin is freely used and traded among early adopters in Malaysia. When it becomes more popular in awareness and usage, then it will most probably be assessed by the authorities in Malaysia.
“I would think that the regulation of Bitcoin then will follow other countries, where it is treated as an asset. And taxes will be similar to Real Property Gains Tax (RPGT),” opined Ismail, adding that transactions will most probably be subjected to auditing and Goods and Services Tax (GST) once the authorities start recognising Bitcoin.
What’s the future of Bitcoin?
Some people compare the invention of Bitcoin with the invention of the computer and even the Internet. However, there have been other ideas like Crypto Currencies 2.0 and Alternate Coins (AltCoins) being talked about to replace Bitcoin as they address the problems that Bitcoin face. None of these “ideas” have materialised yet.
Like any other new investment, the early adopters will reap the most benefits if the investments become successful. Malaysians can still get into the game by buying a Bitcoin Top-up Card online that ranges from RM10 to RM1,000.
“Though Bitcoin has had five years head start, it is still not perfect. Let’s see how it pans out,” said Ismail.
* At the time of writing, 1 Bitcoin is equivalent to RM1,613.63.