Malaysia's Regulated Crypto Market Sees 23% Growth Amid Shariah Framework Expansion

Malaysia's regulated crypto trading market has seen significant growth, reaching RM17.14 billion in 2025, up 23% from the previous year. This growth is attributed to the country's explicit Shariah treatment for several major tokens, making it one of the more open Islamic-finance markets for cryptocurrency.

Despite this growth, Fitch Ratings notes that banks in Malaysia have not yet generated significant revenue from crypto trading. In fact, across all Fitch-rated Islamic banks, cryptocurrency trading has not produced material revenue. The agency expects offerings to develop gradually in selected Islamic markets, with Malaysia and the United Arab Emirates further along than most.

The Securities Commission Malaysia independently reported the same 23% turnover increase when it revised its digital-asset exchange rules on May 20. The changes streamlined token listings but raised requirements for financial resilience, management, and safeguarding customer assets. Regulated exchanges are also due to join the Financial Markets Ombudsman Service in 2026, giving customers a formal dispute channel.

The regulator's Shariah framework is unusually explicit, with Bitcoin, Ether, XRP, and Stellar identified as Shariah-compliant tokens. However, Fitch notes that growth has not produced a broad exchange market, with Luno accounting for 97.82% of domestic digital-asset exchange value at year-end.

The agency warns that banks moving into custody or brokerage would add significant operational, liquidity, compliance, and reputational risks. Investors should look for bank-reported custody or brokerage revenue, a less concentrated split of exchange turnover, and measurable institutional demand under the revised rules.