Luno to introduce Ripple early next year

The move is in line with SC’s regulation that allows Ripple to be traded along with bitcoin and ethereum

by AFIQ AZIZ / pic by TMR

LUNO Malaysia Sdn Bhd, hard on the heels of the relaunched digital assets exchange (DAX), expects to introduce Ripple, the alternative coin (altcoin) that currently has the third-largest market capitalisation of US$9.2 billion (RM38.7 billion), including Ripple.

According to the company, Ripple is a cryptocurrency that has been approved by the Securities Commission (SC).

“So it is definitely a possibility we are exploring. However, it is not yet listed on Luno. What we can say at this time is that we are planning to increase our cryptocurrency offerings as we grow, while keeping customer’s safety and compliance with regulations as our highest priority,” said Luno head of Asia, Vijay Ayyar.

Luno South-East Asia GM David Low told The Malaysian Reserve (TMR) the plan is in line with SC’s regulation that allows Ripple to be traded along with bitcoin and ethereum in the country.

He said adopting Ripple in Luno’s platform could further spur the cryptocurrency market, while satisfying the increasing demand for the altcoin domestically.

“As a company, we are not seeing ourselves as a trading platform, but rather as an enabler for new industries such as blockchain and cryptocurrency use cases in general.

“Allowing the trading of this cryptocurrency is only the first step in facilitating and accelerating the adoption of cryptocurrency use cases in Malaysia,” he said in an exclusive interview with TMR.

Bitcoin currently has the largest market capitalisation of US$130.2 billion, while ethereum’s market capitalisation is at around US$15.8 billion.

Low said while bitcoin is used to store value investment, ethereum, on the other hand, has a very interesting feature that allows people to write smart contracts and create suitable programmes to automate desired processes.

Leveraging on blockchain technology, smart contracts are able to facilitate the exchange of money, property, information or anything that people deem appropriate. Attributed to the decentralised nature of blockchain, it allows individuals to bypass the middlemen in establishing a legally binding contract, which traditionally facilitated by the banking institutions.

“Ripple also has a remittance use case which we are excited about. That’s why we want to introduce it to Malaysians, as it allows people on the platform to access and learn about it, and figure out new ways to use this technology for their benefits,” Low said.

He added that Ripple would join the platform late this year or early next year.

According to Luno’s website, users can now buy Ripple in Luno-supported countries via their existing wallet that could be purchased through bitcoin or ethereum.

It also states Ripple could also be transacted faster than bitcoin.

Low said it is pertinent for investors to understand the use cases of each digital coin before making any investment, as different currency is backed by different technologies, which are designed for different purposes.

The trading of digital currency has been in the limelight since 2017 after series of DAXs claimed their operation in Malaysia, following huge folds in bitcoin’s prices.

At the same time, many companies also proposed to create Initial Coin Offerings — a fundraising mechanism to establish a digital coin usage at the marketplace.

Early this year, SC identified some 43 DAXs operating in Malaysia. The authority subsequently offered all operators to submit their application as a recognised market operator to SC.

In June, only three exchanges were approved to continue operation including Luno Malaysia, Sinegy Technologies (M) Sdn Bhd and Tokenize Technology (M) Sdn Bhd.

The three companies were given nine months to comply to SC’s requirement for full approval. Luno Malaysia obtained the approval on Oct 14, 2019.

Low said since the relaunch in late October, Luno, which has three million registered customers or wallets around the world, has seen its existing clients reactivating their accounts.

Around RM2.5 million was traded within the first two weeks. Low said of the total, Luno saw more weight of investment rather than withdrawal.

He said Malaysian customers form a substantial number of the company’s total user base in the whole world.

“It is even larger compared to Jakarta (Indonesia) and Singapore,” he said.

The London-based company was formed in 2013 before joining the Malaysian market two years later.