More women dabbling in digital asset investment

Digital assets offer opportunities to empower women in harnessing their wealth value, also as a mean to attain financial freedom 

by NURUL SUHAIDI & ASILA JALIL / Pic by BLOOMBERG

THE increased participation of women in the crypto investment field will enable them to seek out new investment and business opportunities, and to gain equal footing in the male-dominated tech industry. 

Luno Malaysia marketing manager Scarlett Chai noted their involvement also indicates this asset is accessible and viable, and will inspire more women to explore the asset class. 

She added that digital assets offer opportunities to improve on the traditional financial system and empower women in harnessing their wealth value, which is also a means to attain financial freedom. 

On Luno’s platform, female users have grown from 16,000 in 2020 to more than 120,000 in 2021, Chai informed. 

“The trend of investing in crypto assets among women is definitely growing and women are increasingly looking for smarter ways to invest as they realise the advantages of digital assets in helping them achieve financial independence,” she said during the webinar titled “Women Breaking Barrier in Crypto and Sports” organised by Luno. 

“Not only the number has been encouraging, but based on the data on Luno’s female Malaysian user activity in 2021, the transaction volume of female users has increased twelve times year-on-year (YoY) from RM170 million to over RM2 billion, indicating a positive trend of digital asset investment among women in Malaysia,” she said. 

Most female users on the Luno exchange in Malaysia buy cryptocurrencies for investment, while the rest are for trading, sending and receiving, and payments. 

In term of age, most of the transactional activities are undertaken by the 30-39 age group (33%), followed by 25-29 (25%), 18-24 (17%), and 40-49 (16%).

“The majority of female users are from diverse career backgrounds, including education, healthcare, accounting, occupation, administration and manufacturing,” she said.

“As we see a growing number of female users on Luno, we want to create a safe space for women to learn about digital assets and committed to educating the public on the power of digital assets as an alternative investment. 

“Women in general are more cautious and less risk takers, however, we need to have that courage and educate ourselves with something we are less familiar with.” 

She said growing wealth through savings alone is not that impactful and sustainable, hence it is important to take the first step and think about investment and expand knowledge on the available asset classes. 

As many crypto investments are still in the infancy stage, Chai encourages women to begin familiarising themselves with the concept and not just rely only on traditional investment. 

She added that having discipline, knowledge, adequate research, proper financial strategy and risk appetite is necessary as volatility in the asset class is very common. 

Leona Chin, a female investor investment and car racer, said she started to discover and learn crypto investment and asset class through Luno during the lockdown, and realised the space was very much concentrated on male investors during the time. 

“I started discovering the world of crypto and did a lot of learning on it, and soon realised the possibility of earning extra income through crypto investment,” she said during the webinar. 

As an avid and new female investor, she shared five key tips for new investors known as 5D namely diversification, discipline, determination, dedication and drive. 

Chin believes the skills are very much aligned with the skills needed for her profession as a motor sport athlete (car racer). 

“In personal finance and investment, we need to have discipline to follow financial plans, practice self-control, diversify to minimise the risk and remain calm as volatility is really common.” 

The Securities Commission Malaysia’s 2021 annual report indicated RM21 billion in digital assets have been registered across all local registered digital asset exchanges in 2021. 

The total number of digital asset accounts rose 300% to 760,000 in 2021 compared to 190,000 accounts in 2020, with 62% of investors below the age of 35. 

The growing usage of digital assets for payments may lead to currency substitution and undermine the central bank’s monetary policy and pose potential risks to the broader economy, according to Bank Negara Malaysia (BNM). 

BNM, in its 2021 annual report, stated among its disadvantages include currency substitution that may impact the bank’s ability to manage inflation and implement effective counter-cyclical policies to foster sustainable economic growth. 

“Digital assets could also give rise to macro-financial risks, affecting both the financial system and economy. 

“If the public find it more attractive to keep their savings in digital assets such as stablecoins, this could cause large shifts of deposits away from banks. Such shifts may increase the banks’ dependence on costlier and less stable funding sources (eg wholesale deposits). This may in turn drive up the cost of financing for borrowers and increase vulnerabilities to bank runs,” the central bank noted. 

BNM also stated digital assets may be a conduit for money laundering and terrorism financing due to the lack or absence of customer identification. 

Conversely, the central bank stated digital assets have the potential to advance efficiency in financial services including further service automation, improved liquidity management, and faster and cheaper settlement. 

BNM recognises the potential benefits of stablecoins, particularly for enhancing crossborder payments. 

“Hence, we are exploring the appropriate regulatory approach to manage and mitigate risks associated with stablecoins. 

“Given the international dimensions involved in cross-border payments, we will be guided by the principles issued by international standard setting bodies to ensure appropriate regulation, supervision, and oversight of stablecoin arrangements.”