Members of the public are urged to be vigilant when conducting investments in cryptocurrencies in view of the fast-paced nature at which the technology is developing.
Home Affairs Minister YB Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Hj Awang Abu Bakar Hj Apong said that the public must be vigilant and exercise extreme caution when dealing with cryptocurrencies and understand the risks associated with them, as virtual currencies are generally not backed by tangible assets and remain unregulated in many jurisdictions.
“Whilst the legitimate use of cryptocurrencies offer several benefits such as increased payment efficiency and lower transaction costs, we must remain alert and vigilant of its risks,” he said in his keynote address during the Asia Asset Management 13th Annual Brunei Darussalam Roundtable at The Empire Hotel & Country Club yesterday.
The minister highlighted the anonymous characteristic of cryptocurrencies and their global reach present potential money laundering and terrorist financing risks.
“Furthermore, cryptocurrency exchanges have been known to be susceptible to attacks by hackers and this has affected not only pecuniary losses but also affects investors’ confidence as well,” he added.
However, the minister is determined that blockchain, the underlying technology that drives cryptocurrencies, can be leveraged on.
As blockchain is relatively new, he said, technical expertise in the area is rare and may require investments into human capital.
“In the financial industry, we see blockchain technology being applied to payments and transactions to lower costs to consumers and users. The speed of transactions is almost instantaneous,” said the minister.
The role of blockchain technology for capital markets was among the key topics discussed at yesterday’s roundtable organised by Asia Asset Management.
Supported by the Brunei Darussalam Capital Market Association (BCMA), the event saw more than 140 participants and delegates from across Asia congregating to discuss the latest issues and trends affecting capital markets, finance, technology and global investments.