Every new year, it is our customary habit at the Technology Practice Group to lay down our top five predictions on what we anticipate will unfold over the course of the year, or perhaps, more candidly, what we hope to see materialising in 2026.
Looking back at 2025, it is fair to say that the year was particularly well positioned as the point at which the initial catalysts for the sea change in the fintech and digital asset landscape were set in motion, especially changes that we are likely to see unfold more meaningfully in 2026. Whether it was the inaugural Regulatory Sandbox established by the Securities Commission, the Digital Asset Innovation Hub introduced under Bank Negara Malaysia, or the Consumer Credit Act 2025, which was officially published on 31 December 2025 following the granting of Royal Assent on 22 December 2025, these pivotal milestones collectively laid the groundwork for a major shift in the fintech landscape.
Against this backdrop, and while we do not claim to have a crystal ball, this article outlines what we consider to be the top five themes likely to shape Malaysia’s fintech and digital asset space in 2026. Our aim, as always, is to provide early visibility for the legal industry, particularly in-house teams, so they can plan, prepare, and position themselves accordingly.
1. Stablecoin: Potential Official Recognition and Payment Use
Following the release of the Discussion Paper on Asset Tokenisation in the Malaysian Financial Sector (“Discussion Paper”), one of the themes that has captured the most attention is stablecoin. Those who have been active in the digital asset and fintech space for some time will know that stablecoins have always been a sensitive and somewhat touchy subject, particularly in light of the collapse of the infamous UST algorithmic stablecoin in the Terra ecosystem, a collapse that wiped out billions in value within hours, with deeply tragic consequences for some holders.
Yet, the market is evolving. Stablecoins such as USDC and USDT, the original stalwarts in the space, are gradually gaining institutional recognition and adoption by regulated financial institutions. However, both USDC and USDT remain fundamentally USD-denominated, and for stablecoins to function effectively in Malaysia, they must be MYR-denominated. Against this backdrop, the establishment of the Digital Asset Innovation Hub and the release of the Discussion Paper send a strong signal that the regulatory framework for stablecoins is likely to become clearer. After all, discussions around tokenising real-world assets cannot progress without a reliable underlying liquidity mechanism. While reconciliation with the Financial Services Act 2013 will still be necessary, we anticipate that by 2026, stablecoins may be permitted for limited or controlled use cases, potentially for payment purposes within inter- or intra-corporate environments, or in B2B settings. Hence, while it may not operate with the same flexibility as e-money, this would nonetheless mark a critical first step in establishing a working stablecoin ecosystem in Malaysia.
2. Entry of Global Digital Asset Players
A second potential development is the gradual entry of global digital asset or crypto players into Malaysia, bringing a wider range of digital asset products. Those active in the local fintech scene will recognize that Malaysia’s current digital asset offerings remain limited compared to overseas markets. This naturally creates a gap when Malaysian users faced with limited local options, they may then naturally seek to bridge by turning to foreign platforms or products recognized only outside Malaysia.
This dynamic represents both a challenge and an opportunity. On one hand, it pressures local players to elevate their offerings by introducing more innovative, competitive products to retain market relevance. On the other, it creates a pathway for foreign global players to enter the market with financial services that are tried, tested, and increasingly recognized internationally. This competitive pressure could span a wide spectrum of offerings, from 0DTE and predictive markets to options, margin trading, and leverage on digital asset exchanges. In short, 2026 may well be the year that local players are compelled to rise to the challenge, or risk ceding market share to international entrants.
3. Rise of Regulated Fintech Players in Financial Credit
With the final publication of the Consumer Credit Act 2025, we anticipate its commencement likely in Q1 or Q2 of 2026. Once in effect, fintech offerings such as Buy Now, Pay Later, invoice factoring, and equipment leasing will finally operate within a regulated framework.
Throughout 2025, we witnessed a surge of fintech players offering such credit services, but truthfully, this growth has often resembled the “wild-wild west” where high profit margins paired with unregulated risk. As any seasoned player knows, poorly managed credit can be the seed of a bubble, and unregulated providers risk not only financial losses but also broader systemic disruption.
The commencement of the Consumer Credit Act 2025 will therefore serve as a critical litmus test, identifying which fintech companies are genuinely qualified to operate as credit providers under proper regulatory oversight. This process will naturally filter out weaker or unscrupulous players. At the same time, it is likely to attract global, reputable credit providers who see a clear, regulated path to competing in Malaysia’s growing financial credit market. As Warren Buffett once said, “Only when the tide goes out do you discover who’s been swimming naked”, this will certainly hold true for fintech players navigating the regulatory waters in 2026.
4. Launch of Tokenized Capital Market Products
Following the Proposed Regulatory Framework for Offering and Dealing in Tokenised Capital Market Products issued by the Securities Commission, alongside the establishment of the inaugural Regulatory Sandbox, 2026 seems to be shaping up to be the year when tokenized capital market products finally debut in Malaysia.
Initial offerings will likely take the form of “digital twins” rather than native tokens. While many in the industry advocate for native tokens, it is important to recognize that innovation begins with manageable steps. Digital twins provide a practical entry point, enabling financial instruments and products to be traded and transacted on blockchain, establishing a foundation for broader adoption in the years to come.
5. Institutional Adoption of Blockchain, Digital Assets, and Tokenization
Finally, we may see the ultimate institutional adoption of blockchain, digital assets, and tokenization gaining further momentum. In truth, this may no longer be a prediction, but an observable trend unfolding before our eyes. Increasingly, we are receiving inquiries from some of the largest organizations seeking guidance on how to strategically position themselves for the adoption wave of blockchain, tokenization, and digital assets.
This is far from coincidental. Macro and micro signals point clearly to an accelerating tailwind, where in the United States, global institutions such as JP Morgan and BlackRock are already advancing blockchain adoption aggressively. Coupled with public consultation papers released by both the Securities Commission and Bank Negara Malaysia, it is evident that regulatory frameworks are aligning to facilitate this evolution. The question for institutions today is not whether this change is coming, but whether they are strategically positioning to capture the wave, or risk playing catch-up later. On the ground, adoption within the fintech space is already widening, particularly among financial institutions leading the charge, and there is every reason to believe that 2026 will see this trend intensify further.
Conclusion
2026 promises to be a defining year for Malaysia’s fintech and digital asset ecosystem. From clearer stablecoin regulations, the entry of global players, and the rise of regulated fintech credit providers, to the introduction of tokenized capital market products and broader institutional adoption of blockchain, the industry is poised for transformative change.
For legal practitioners, in-house teams, and financial institutions, understanding these developments is not just about staying informed, it is about strategically positioning for the future. Those who anticipate, prepare, and adapt will not only navigate the changes successfully but may also shape the very trajectory of Malaysia’s financial innovation landscape in the years to come.
The Technology Practice Group of Halim Hong & Quek continues to be recognised by leading legal directories and industry benchmarks. Recent accolades include FinTech Law Firm of the Year at the ALB Malaysia Law Awards (2024 and 2025), Law Firm of the Year for Technology, Media and Telecommunications by the In-House Community, FinTech Law Firm of the Year by the Asia Business Law Journal, a Band 2 ranking for FinTech by Chambers and Partners, and a Tier 3 ranking by Legal 500.
If you have any questions on the fintech, digital asset or tokenization, please feel free to reach out to the partners at the Technology Practice Group, Ong Johnson and Lo Khai Yi, for consultation.
About the authors
Ong Johnson Partner Head of Technology Practice Group Fintech, Data Protection, Technology, Media & Telecommunications (“TMT”), IP and Competition Law [email protected]
◦ Lo Khai Yi Partner Co-Head of Technology Practice Group Technology, Media & Telecommunications (“TMT”), Technology Acquisition and Outsourcing, Telecommunication Licensing and Acquisition, Cybersecurity [email protected].
Stablecoins, Tokenized Assets, and Global Players: 5 Fintech Shifts That Will Shake Malaysia in 2026
Every new year, it is our customary habit at the Technology Practice Group to lay down our top five predictions on what we anticipate will unfold over the course of the year, or perhaps, more candidly, what we hope to see materialising in 2026.
Looking back at 2025, it is fair to say that the year was particularly well positioned as the point at which the initial catalysts for the sea change in the fintech and digital asset landscape were set in motion, especially changes that we are likely to see unfold more meaningfully in 2026. Whether it was the inaugural Regulatory Sandbox established by the Securities Commission, the Digital Asset Innovation Hub introduced under Bank Negara Malaysia, or the Consumer Credit Act 2025, which was officially published on 31 December 2025 following the granting of Royal Assent on 22 December 2025, these pivotal milestones collectively laid the groundwork for a major shift in the fintech landscape.
Against this backdrop, and while we do not claim to have a crystal ball, this article outlines what we consider to be the top five themes likely to shape Malaysia’s fintech and digital asset space in 2026. Our aim, as always, is to provide early visibility for the legal industry, particularly in-house teams, so they can plan, prepare, and position themselves accordingly.
1. Stablecoin: Potential Official Recognition and Payment Use
Following the release of the Discussion Paper on Asset Tokenisation in the Malaysian Financial Sector (“Discussion Paper”), one of the themes that has captured the most attention is stablecoin. Those who have been active in the digital asset and fintech space for some time will know that stablecoins have always been a sensitive and somewhat touchy subject, particularly in light of the collapse of the infamous UST algorithmic stablecoin in the Terra ecosystem, a collapse that wiped out billions in value within hours, with deeply tragic consequences for some holders.
Yet, the market is evolving. Stablecoins such as USDC and USDT, the original stalwarts in the space, are gradually gaining institutional recognition and adoption by regulated financial institutions. However, both USDC and USDT remain fundamentally USD-denominated, and for stablecoins to function effectively in Malaysia, they must be MYR-denominated. Against this backdrop, the establishment of the Digital Asset Innovation Hub and the release of the Discussion Paper send a strong signal that the regulatory framework for stablecoins is likely to become clearer. After all, discussions around tokenising real-world assets cannot progress without a reliable underlying liquidity mechanism. While reconciliation with the Financial Services Act 2013 will still be necessary, we anticipate that by 2026, stablecoins may be permitted for limited or controlled use cases, potentially for payment purposes within inter- or intra-corporate environments, or in B2B settings. Hence, while it may not operate with the same flexibility as e-money, this would nonetheless mark a critical first step in establishing a working stablecoin ecosystem in Malaysia.
2. Entry of Global Digital Asset Players
A second potential development is the gradual entry of global digital asset or crypto players into Malaysia, bringing a wider range of digital asset products. Those active in the local fintech scene will recognize that Malaysia’s current digital asset offerings remain limited compared to overseas markets. This naturally creates a gap when Malaysian users faced with limited local options, they may then naturally seek to bridge by turning to foreign platforms or products recognized only outside Malaysia.
This dynamic represents both a challenge and an opportunity. On one hand, it pressures local players to elevate their offerings by introducing more innovative, competitive products to retain market relevance. On the other, it creates a pathway for foreign global players to enter the market with financial services that are tried, tested, and increasingly recognized internationally. This competitive pressure could span a wide spectrum of offerings, from 0DTE and predictive markets to options, margin trading, and leverage on digital asset exchanges. In short, 2026 may well be the year that local players are compelled to rise to the challenge, or risk ceding market share to international entrants.
3. Rise of Regulated Fintech Players in Financial Credit
With the final publication of the Consumer Credit Act 2025, we anticipate its commencement likely in Q1 or Q2 of 2026. Once in effect, fintech offerings such as Buy Now, Pay Later, invoice factoring, and equipment leasing will finally operate within a regulated framework.
Throughout 2025, we witnessed a surge of fintech players offering such credit services, but truthfully, this growth has often resembled the “wild-wild west” where high profit margins paired with unregulated risk. As any seasoned player knows, poorly managed credit can be the seed of a bubble, and unregulated providers risk not only financial losses but also broader systemic disruption.
The commencement of the Consumer Credit Act 2025 will therefore serve as a critical litmus test, identifying which fintech companies are genuinely qualified to operate as credit providers under proper regulatory oversight. This process will naturally filter out weaker or unscrupulous players. At the same time, it is likely to attract global, reputable credit providers who see a clear, regulated path to competing in Malaysia’s growing financial credit market. As Warren Buffett once said, “Only when the tide goes out do you discover who’s been swimming naked”, this will certainly hold true for fintech players navigating the regulatory waters in 2026.
4. Launch of Tokenized Capital Market Products
Following the Proposed Regulatory Framework for Offering and Dealing in Tokenised Capital Market Products issued by the Securities Commission, alongside the establishment of the inaugural Regulatory Sandbox, 2026 seems to be shaping up to be the year when tokenized capital market products finally debut in Malaysia.
Initial offerings will likely take the form of “digital twins” rather than native tokens. While many in the industry advocate for native tokens, it is important to recognize that innovation begins with manageable steps. Digital twins provide a practical entry point, enabling financial instruments and products to be traded and transacted on blockchain, establishing a foundation for broader adoption in the years to come.
5. Institutional Adoption of Blockchain, Digital Assets, and Tokenization
Finally, we may see the ultimate institutional adoption of blockchain, digital assets, and tokenization gaining further momentum. In truth, this may no longer be a prediction, but an observable trend unfolding before our eyes. Increasingly, we are receiving inquiries from some of the largest organizations seeking guidance on how to strategically position themselves for the adoption wave of blockchain, tokenization, and digital assets.
This is far from coincidental. Macro and micro signals point clearly to an accelerating tailwind, where in the United States, global institutions such as JP Morgan and BlackRock are already advancing blockchain adoption aggressively. Coupled with public consultation papers released by both the Securities Commission and Bank Negara Malaysia, it is evident that regulatory frameworks are aligning to facilitate this evolution. The question for institutions today is not whether this change is coming, but whether they are strategically positioning to capture the wave, or risk playing catch-up later. On the ground, adoption within the fintech space is already widening, particularly among financial institutions leading the charge, and there is every reason to believe that 2026 will see this trend intensify further.
Conclusion
2026 promises to be a defining year for Malaysia’s fintech and digital asset ecosystem. From clearer stablecoin regulations, the entry of global players, and the rise of regulated fintech credit providers, to the introduction of tokenized capital market products and broader institutional adoption of blockchain, the industry is poised for transformative change.
For legal practitioners, in-house teams, and financial institutions, understanding these developments is not just about staying informed, it is about strategically positioning for the future. Those who anticipate, prepare, and adapt will not only navigate the changes successfully but may also shape the very trajectory of Malaysia’s financial innovation landscape in the years to come.
The Technology Practice Group of Halim Hong & Quek continues to be recognised by leading legal directories and industry benchmarks. Recent accolades include FinTech Law Firm of the Year at the ALB Malaysia Law Awards (2024 and 2025), Law Firm of the Year for Technology, Media and Telecommunications by the In-House Community, FinTech Law Firm of the Year by the Asia Business Law Journal, a Band 2 ranking for FinTech by Chambers and Partners, and a Tier 3 ranking by Legal 500.
If you have any questions on the fintech, digital asset or tokenization, please feel free to reach out to the partners at the Technology Practice Group, Ong Johnson and Lo Khai Yi, for consultation.
About the authors
Ong Johnson
Partner
Head of Technology Practice Group
Fintech, Data Protection,
Technology, Media & Telecommunications (“TMT”),
IP and Competition Law
[email protected]
◦
Lo Khai Yi
Partner
Co-Head of Technology Practice Group
Technology, Media & Telecommunications (“TMT”), Technology
Acquisition and Outsourcing, Telecommunication Licensing and
Acquisition, Cybersecurity
[email protected].
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