Bitcoin (BTC) is the world’s first decentralized cryptocurrency. It’s an asset that transcends borders, allowing its users to buy and trade internationally without restrictions. Despite this accessibility, users in different countries may have to acquire Bitcoin in different ways due to their government’s stance toward the leading digital currency. 

Fortunately for Malaysian crypto traders, it is legal to buy Bitcoin in Malaysia. Malaysian Bitcoin regulations allow regulated exchanges, Bitcoin ATMs and more to operate in the country. For those curious about buying Bitcoin with Malaysian ringgits, this article serves as a step-by-step guide to buying Bitcoin in Malaysia.

First, here is a quick look at the laws regarding cryptocurrency in Malaysia.

Legal status of Bitcoin in Malaysia

As of April 2024, it is legal to buy Bitcoin in Malaysia. However, Bitcoin is not legal tender in the country. While holding and buying Bitcoin is legal, cryptocurrency payment methods in Malaysia are prohibited at local businesses unless the business explicitly chooses to accept them.

In this same vein, buying from an exchange legally supported in Malaysia is vital. A regulated exchange follows cryptocurrency laws in Malaysia, including Anti-Money Laundering (AML) and Know Your Customer (KYC) policies, to minimize the risk of theft and scams.

That said, the Malaysian government considers Bitcoin a security. This classification as a security means Bitcoin transactions are not subject to capital gains tax. However, frequent traders generating a lot of profit may have their earnings fall under income tax if they create enough profit to consider it their primary income.

How to safely buy Bitcoin in Malaysia

There are multiple ways to buy Bitcoin in Malaysia. Before getting involved, prospective crypto buyers must acquire a crypto wallet.

Crypto wallets in Malaysia come in various forms, such as exchange, mobile or hardware wallets.

Exchange wallets

Exchange wallets are one of the most popular crypto wallets. As the name suggests, crypto exchanges provide wallets for users to hold and trade their assets. Exchange wallets are great for everyday traders, as they’re always connected to the internet with assets readily available.

Despite their advantages, exchanges aren’t tamper-proof. Crypto trading platforms are constantly under threat from theft and bad actors. A user’s holdings may disappear if an exchange suffers a hack and funds are stolen.

Mobile wallets

Mobile wallets are tied to a user’s mobile device. Often utilized through an app, mobile wallets are considered safer than exchange wallets as assets are managed on a single device rather than a third-party custodian.

As for a mobile wallet’s downsides, losing a mobile device means losing access to its crypto wallet. Bad actors can also steal a mobile wallet’s information through external methods, so avoiding open networks is best.

Hardware wallets

Hardware wallets are one of the safest Bitcoin investment options in Malaysia due to their offline nature and top-tier security algorithms. They’re ideal for long-term holders, as hardware wallets rarely connect to the internet. This lack of connection keeps them safe from hackers and other threats.

After acquiring a crypto wallet, users can buy and store Bitcoin through an exchange or an ATM, among other methods.

Malaysian fiat-to-crypto exchanges

Users must create a crypto exchange account on one of the many available cryptocurrency exchanges in Malaysia. Most exchanges abide by the country’s KYC and AML policies and allow buying Bitcoin with credit/debit cards in Malaysia. Here is a list of some Bitcoin brokers in Malaysia:

Binance

While Binance was one of the few cryptocurrency platforms in Malaysia that were briefly banned, it became available again in the region in March 2022.

Binance is one of the world’s largest cryptocurrency exchanges. Malaysian citizens must fund their account through their local bank or by sending crypto from another wallet or exchange. Binance provides various trading methods to customize the experience, such as limit and market orders, stop-limit orders and more.

Luno

Established in 2013, Luno is a long-standing crypto exchange and Malaysia’s first fully licensed crypto trading platform.

The platform’s mobile app allows the buying and selling of crypto, as well as some basic trading capabilities like scheduled trading. It also features an extensive learning platform for users to participate in cryptocurrency education in Malaysia.

Bitcoin ATMs in Malaysia

Bitcoin ATMs are a convenient way to enter the Malaysian crypto market, as they’re designed to be an accessible purchase method. One can usually find a Bitcoin ATM in a local supermarket or gas station.

One can place some cash into the machine to use a Bitcoin ATM. From there, a QR code appears that the user can scan and transfer the funds to their Bitcoin wallet, one of the many secure methods for purchasing Bitcoin in Malaysia.

Unfortunately, that accessibility comes at a cost. Bitcoin ATMs often charge higher fees than other methods of purchase.

One can find Malaysian Bitcoin ATMs in various places, such as Langkawi, Petaling Jaya and Klang.

How to buy Bitcoin peer-to-peer in Malaysia

Peer-to-peer trading is Bitcoin’s original purpose and remains an alternative way to make a Bitcoin purchase in Malaysia. It involves directly buying or selling Bitcoin with one other individual, eschewing third-party intermediaries. Paxful and Reminato are among the most common P2P platforms in Malaysia.

Traders can meet one another in person or use a peer-to-peer platform to buy Bitcoin. What follows are the general steps for peer-to-peer Bitcoin trading in Malaysia. Crypto traders can fund their wallets through bank transfers, credit/debit, gift cards and many other ways. Upon funding, there are two main ways to transact: creating an offer or browsing existing offers.

When creating a buy offer, the trader must select their purchase method. From there, they can choose between a market price or a fixed price. The market price will follow Bitcoin’s price movements, while fixed price involves setting the exact price one wishes to pay.

If buying through market price, the trader must set an offer margin. This is the percentage one is willing to range from Bitcoin’s market price when purchasing. For example, a -10% margin means they want to buy at 10% less than the market price once a seller accepts the offer.

Once an offer’s purchase method and margins are set, one must set the order’s time limit. A time limit decides how long the buyer has to purchase once an offer is made. If the buyer fails to complete the offer within this time limit, the seller’s offer will expire.

Finally, there are a few advanced options to configure. Buyers can write down their offer terms and trading instructions, select a country to target, and even limit proxy or virtual private network users, among other options.

Aside from creating an offer, users can browse already existing sell orders. Buyers can filter sell orders by offer location and accepted payment methods or browse general sell orders. Upon selecting a sell order, the buyer can view the seller’s profile information, margin rate, ID verification and trade time limit. If everything looks good, the buyer inputs the amount of Bitcoin they want. They can chat with the seller and ask additional questions.

Once ready, the buyer will commit to the purchase, and their funds go into escrow. The seller sends Bitcoin using the preferred method, and once the Bitcoin blockchain validates the transaction, it will appear in the buyer’s wallet.

The future of cryptocurrencies in Malaysia

The future of cryptocurrencies in Malaysia is uncertain. Despite growing acceptance, Bank Negara Malaysia — the country’s central bank — has not declared cryptocurrencies as legal tender and warned about potential risks. Nonetheless, the Securities Commission Malaysia regulates cryptocurrency exchanges, indicating a certain degree of governmental acknowledgment.

The government explores possible advantages but is still cautious about volatility and misuse. The result is probably dependent on how the regulatory environment changes. Malaysia may decide on more stringent regulations or for gradual acceptance and robust consumer protection. The future of cryptocurrency in the Malaysian economy will largely be shaped by its effects on traditional finance and its ability to foster innovation in a regulated setting.