Maybank webinar: The fact, folklore and future of cryptocurrency

KUALA LUMPUR: Cryptocurrency is creating an evolution in the financial technology with its gradual application into the financial system, despite its volatility.

Malayan Banking Bhd group chief risk officer Gilbert Kohnke said investors should understands the risk tolerance and choose the right means before investing in digital currency.

“It is revolutionary for time on how investment are going to be conducted. We are in the early stages of this platform with a number of different areas of certainty,” Kohnke said at a virtual webinar on “Asean New Finance: Crypto Opportunities & Hurdles Confirmation” by Maybank here yesterday.

He said the market space was running 24/7 but a lot of questions were left unanswered on how the financial institutions might want to bring crypto into main stream.

“Nevertheless, we are still going through this transition. There has been a lot of interest and work going into it (crypto or digital asset),” he said.

Kohnke said there were 6,000 different coins in the market but trust issue presented the main problem that might hinder wide-acceptance for this crypto investment.

“Trust is the biggest issue and it needs to be resolved. It also involves risk and it should be addressed as people start diversifying their investment,” he said.

Kohnke said there was a clear interest in crypto with the general acceptance, adding that most financial institutions begun to look into this space and consider how it might be applied while gauging this as an investment for asset class.

Blockchain Association co-chairman and fund advisor Chia Hock Lai said as money became more digital, it presented a new form of limitation due to duplication.

“Initial representation of money was mainly physical in early days. The advantage was it allowed the money transfer peer-to-peer but the downside was it was not convenient to be transferred long-distance,” he said.

As a result, Chia said trusted intermediaries like the banks were introduced to prevent double-span problem but it also posed new problem as it took longer time to process with fee charges to perform the function.

“In 2009, Bitcoin was launched, aimed to replace the intermediaries with a set of codes running on multiple computer servers – it cut middlemen/intermediaries in order to trade money,” he said.

Ethikom Consultancy founder and chief executive officer Nizam Ismail said there were many volatilities in conventional financial products too, depending on time and space for certain kind of investors.

“We need to be careful in different concept of investment – crypto is interesting as a store of value,” he warned.

Nizam said blockchain technology was the underlying technology for bitcoin.

“It is a technology of trust and immutable technology – decentralised. Here are lot of tremendous application for blockchain technology for financial services and companies raising fund or token issuance,” he added.

Nizam said blockchain technology disrupted financial services and cut intermediaries and put this basket of algorithm to run the financial business.

“It is volatile for crypto but a small per cent of money you can play with. It is the game that can potentially be quite rewarding,” he added.

Source: NST