Luno aims for crypto Savings Wallet on demand

The feature has been rolled out in other markets worldwide by Luno, but it’s availability in Malaysia is currently under review by the SC

by AFIQ AZIZ / pic by RAZAK GHAZALI

LUNO Malaysia Sdn Bhd is looking to establish a cryptocurrency Savings Wallet that could offer an interest return of 3%-4% per annum subject to market conditions.

Malaysia’s first licensed digital asset exchange (DAX) country manager Aaron Tang said the new digital asset feature is expected to attract investors.

The feature has been rolled out in other markets worldwide by Luno, but it’s availability in Malaysia is currently under review by Securities Commission Malaysia (SC) — the regulator for digital assets investment.

“The Savings Wallet will allow you to allocate the bitcoin in your Luno wallet to what we call interest bearing accounts. So, not only will you be able to store your coin safely, but will also be able to earn 3%-4% interest on that digital asset,” he told a virtual media conference titled “One-year Retrospective by Luno”, yesterday.

This proposal is still currently under review, but Luno hopes to introduce it very soon, Tang said.

In November 2019, Luno relaunched its platform after becoming the first recognised market operator by the SC to run a DAX platform.

The London-based company first set up operations in Malaysia in 2015 and was heavily involved in engagements with regulators on developing new cryptocurrency regulations for the Malaysian market.

Tang said the Savings Wallet is offered in partnership with Genesis, which is the world’s largest digital asset lender.

Funds saved under Luno account will be lent to Genesis — a digital currency group (DCG)-owned company — and the interest paid by borrowers will be channelled back to Luno.

In September, DCG — a blockchain investment firm — has also acquired Luno, which has a retail-focused cryptocurrency exchange with over five million customers spanning over 40 countries.

“Genesis is one of the largest institutional lenders of Bitcoin in the world. We want Genesis to lend out the cryptocurrency to institutional clients.

“These clients will pay interest on the loans they take, this interest will flow back to Luno customers,” Tang said.

However, unlike a normal bank account, these cryptocurrency accounts will not be covered by any deposit protection insurance, according to Luno’s website.

Besides, Tang said Luno is also looking to offer few more cryptocurrencies in 2021. Upon the SC approvals, Luno is only allowed to trade Bitcoin and the second-largest coin in the market, Ethereum.

Additionally, this year, SC has allowed the DAX to offer Ripple and Litecoin to be traded on their platform.

At the virtual media conference, Tang said Luno Malaysia has processed over RM827 million worth of transactions, claiming the largest DAX in the country position with more than 180,000 users — up 40,000 since January while commanding over 90% of the local regulated market share.

Tang said the platform holds over RM165 million worth of cryptocurrencies on behalf of its Malaysian customers so far.

He said 68% of users have bought crypto on their platform for investment purposes — which holds the crypto for a longer period before making withdrawal — while about 10% have bought it for trading.

“It is also noted that the majority of account holders are aged between 30 to 49 years old. This is interesting as we often know from studies, or even perceptions, that only millennials are involved in cryptocurrency.

“However, from our data for Luno, those who adopted digital assets are among the people from the prime working age who have more disposable income,” Tang said.

Additionally, Tang said Luno is looking forward to adding new deposit and withdrawal channels to provide greater convenience and accessibility to users.