Luno, a cryptocurrency exchange based in Malaysia, reported on June 17, 2021, that it has processed approximately US$1 billion (RM4.2 billion) in total transactions so far this year, up from US$300 million (RM1.23 billion) in 2020, as the platform’s user base surged past 300,000 amid global market volatility driven by regulatory crackdowns in China and shifting institutional sentiment.
Luno’s growth in Malaysia
Luno Malaysia has seen a dramatic increase in user adoption. The exchange grew from 180,000 users in 2020 to more than 300,000 currently. More than RM1 billion worth of digital assets, including Bitcoin, Ethereum, Ripple, and Litecoin, are now stored on the platform. Luno is the first digital asset exchange in Malaysia and one of only three supported by the Securities Commission (SC). It commands over 90% of the local market share.
Aaron Tang, Luno Malaysia country manager, said at a briefing, “We believe cryptocurrency adoption is still at its early stage. According to some research, only about 2.5% of the world population own cryptocurrencies.” He noted that many individuals are accepting digital currencies as a resource class, as an installment strategy, a store of significant worth, and support against inflation.
Global headwinds hit crypto markets
The broader cryptocurrency market faced severe turbulence in the weeks leading up to Luno’s announcement. Tesla CEO Elon Musk announced that Tesla would no longer accept Bitcoin as a payment method, citing concerns about the increasing use of fossil fuels for Bitcoin mining and transactions. Following this, Bitcoin dropped more than half from its record high of US$62,575 (RM259,060) achieved in April.
China’s decision to ban digital tokens as a form of payment added further chaos. The Chinese government intensified its crackdown on cryptocurrency trading and mining, triggering a massive sell-off. In April, the total cryptocurrency market capitalization exceeded US$2 trillion. By mid-June, it had halved.
Tang acknowledged the confusion surrounding digital currencies in recent years despite their growing popularity. He called Bitcoin the most well-known digital currency, recording RM15 million of daily exchanges on its platform in Malaysia. He added that Malaysia is one of the primary nations in ASEAN that regulated the digital currency market to help the turn of events and development of advanced resources in the country.
Institutional interest persists
Despite the market downturn, institutional interest in cryptocurrencies remained strong. The likes of Tesla investing in Bitcoin, US Bank BNY Mellon setting up a Crypto Unit, and Mastercard accepting crypto payments all contributed to enormous interest surrounding cryptocurrencies. The asset class has become more attractive to investors amid inflation stresses due to expanded monetary and cash-related improvement.
Since its acquisition by Digital Currency Group (DCG) in September 2020, Luno has seen the number of active global clients increase by 167%, while the number of applications installed expanded by 119%. Luno was ranked in the top six digital currency exchanges worldwide in the CryptoCompare Exchange Benchmark and received the top-level AA rating. The company also maintains a proactive position of working with governments and banks to securely build access to digital currencies globally.
Outlook for Luno and the market
Luno expects to continue exponential growth in 2021, on track to reaching its goal of one billion global customers by 2030. The cryptocurrency industry has seen a heavy year of movement, seriously nudged on the way by institutional financial backers getting Bitcoin due to its store of huge worth properties.
The regulatory environment in Malaysia has been relatively supportive compared to China’s outright ban. The Securities Commission’s recognition of three licensed exchanges, including Luno, provides a framework for growth. However, the global sell-off and uncertainty around regulatory stances in other major economies continue to pose risks. Luno’s ability to maintain its market dominance in Malaysia will depend on how it navigates these headwinds while expanding its user base and transaction volumes.
