Here’s a riddle for you – Name a country that has come down hard on Bitcoin mining, literally speaking. If you vaguely remember a certain Southeast Asian country driving a roller over thousands of pieces of crypto-mining hardware, you’re on the right track.
But now, could Malaysia be looking to legalize cryptocurrency?
Malay says yay or nay?
Malaysia has a rocky relationship with Bitcoin miners, but its residents – especially younger ones – are reportedly interested in the fintech economy and NFTs.
Quoting the country’s Deputy Communications and Multimedia Minister Datuk Zahidi Zainul Abidin, a news outlet reported that the ministry is researching ways for more young people to participate in the digital currency economy and adopt crypto in the future.
For this to take place, Malaysia’s government will need to first legalize such assets. However, the country has been struggling to clamp down on illegal Bitcoin mining that bloomed thanks to relatively cheap electricity rates. In fact, Malaysian officials claimed that 2021 saw an all-time-high in crimes related to illegal crypto-mining such as electricity theft. According to another report,
“To be specific, Malaysia had 570 investigation papers opened, 528 people arrested and RM54 million worth of mining equipment seized in 2021 alone…In terms of seized items, that’s more than a 4200 per cent increase from 2020 to 2021.”
Videos of Malaysian authorities crushing mining rigs worths millions of dollars have previously gone viral as well. Additionally, one such case was recorded as recently as 19 March.
That being said, if crypto is legalized and mining regulations loosen up, could the world see Malaysia step forward to claim a larger part of the average monthly hashrate share? This was 4.59% in August 2021, but with Russia waging war and Kazakhstan enforcing power restrictions, it might be time for a new Bitcoin mining hotspot to assert its dominance.
Hold your horses!
These are exciting prospects for sure, but there are concerns as well. Malaysia’s tropical climate is not well suited to Bitcoin mining. Meanwhile, officials claim that power blackouts and fire accidents are mining risks too.
Furthermore, a cost-benefit analysis is essential, especially now. With Bitcoin trading at $40,962.16 at press time and failing on multiple occasions to break past the $45,000 resistance, there is the question of whether Bitcoin mining in Malaysia will be as profitable as anticipated.
According to a report by Arcane Research, just the electricity cost of mining one BTC in Malaysia ranges from $880 to $20,000 based on the location.
