KUALA LUMPUR: Cryptocurrency is become a popular way for investors to increase their wealth, but a lack of awareness and education about the digital asset may prevent it from reaching its full potential.
Luno Malaysia country manager Aaron Tang said most crypto companies would have trouble dealing with traditional financial institutions due to the misconceptions brought upon by the 'uncertainty and risk' in cryptocurrency.
"Financial institutions are urged to have more dialogues with crypto companies and players as digital assets can add real value. They need to bridge the gap between traditional banks and digital asset companies," he said at a virtual webinar for Asean New Finance: Crypto Opportunities & Hurdles Confirmation, organised by Maybank recently.
Tang said the infrastructure for the digital assets, especially bitcoin is built in a more transparent way and that made people somewhat uncomfortable.
"This is bitcoin's strength because there is no cheating or hiding. Despite the fact that cryptocurrency is still a new asset class, it has produced an impressive return.
"But people still don't understand the digital assets and be equipped with some technical knowledge to invest," he said.
He said regulators face challenges in promoting innovation while having the responsibility to protect the vast majority of the population without discouraging innovation.
"We see the biggest need today is still in the education and the awareness. The biggest place where we can make an impact is to bridge the gap between the traditional way of doing money (finance) and moving into digital assets and cryptocurrencies," he added.
AirCarbon co-founder and chief executive officer Thomas McMahon said investing in cryptocurrency would be the future but investors would need to understand the methodology of the blockchain-technology driven the tokenisation.
For example, he said digital asset such as bitcoin has great potential but the people were still sceptical on its relevance in the financial system.
"The whole world is going to be tokenised in the future. Tokenisation would break the barriers of disallowing portability and interruptibility," he said.
McMahon said although digital banks existed their system framework is not unified and rather broken up into many parts.
Algorithma managing director Sankalp Shangari said a lot of money has been pouring into cryptocurrency as the digital asset's technology would keep on evolving.
He agreed that the financial system could be tokenized as a result of the increasing use of digital assets.