Malaysia's recent flirtation with Binance, symbolized by CZ's meeting with Prime Minister Anwar Ibrahim, is more than just a photo op. It's a high-stakes gamble. The potential payoff? Becoming a southwest blockchain mecca. The danger? Wasting time, money and missing the opportunity to catch up. Put aside the glitz and glamour. Take a fresh perspective on what success really looks like.

Startups Registered: Are Numbers Meaningful?

The first data point to watch: the number of blockchain startups registered in Malaysia. Simple, right? Here's the unexpected connection: quantity doesn't equal quality. Let’s not fall into the con of cheering empty, make-believe progress.

Think back to the dot-com boom. Or better yet, not everyone and their grandmother should have launched a website, if they were the type that revolutionized the internet. Just as an increase in blockchain startups doesn’t ensure meaningful innovation to our favorite technology puzzle. It may only result in a tsunami of me-too projects pursuing the latest trends and fads.

We should be focusing on the quality of these startups. Are they solving real-world problems? Are they attracting top talent? Are they developing genuinely novel solutions?

They haven't necessarily boasted the highest number of blockchain startups, but they've fostered a vibrant ecosystem that attracts serious players. Why? All because they prioritized building an environment with lots of regulatory support and focused on bringing in the best and brightest talent.

Before the Binance meeting, Malaysia’s blockchain startup ecosystem was non-existent, if we’re being generous. Let's say we had 50 registered startups. A 20% improvement since Binance would still put us at 60. Is that impressive? Not if half of them are vaporware.

We have to cultivate an environment where only the best of those startups succeed. We bring on seasoned developers to lead our efforts. In addition to opening doors to funding, we are establishing a regulatory framework that fosters innovation while protecting investors. Speaking of funding…

VC Funding: Follow the Smart Money

This leads us to the second critical data point: the amount of VC funding invested. Forget the happy government pronouncements and all the PR glitz. Follow the smart money. Venture capitalists are, by nature, risk-averse. They're not going to throw money at a country just because the Prime Minister had a friendly chat with CZ.

Business models, teams, profit VCs have become more realistic about finding business models and paths to profitability. They need a regulatory environment that’s friendly and predictable. More than anything, they want to see the proof — that the government is really committed to adopting blockchain and not just talking about it.

Here’s where the link to anxiety starts to factor in. The most terrifying thing for any VC is regulatory uncertainty. Will the government change its mind? Will new regulations stifle innovation? How—and at what value—will they ever grow to exit their investments successfully?

At the moment, Malaysia’s VC funding in blockchain is very low. In fact, it’s not even close when compared to Switzerland and Singapore. So hypothetically, let’s say we’re pulling in $10 million a year. A more realistic, and important, aspirational target post-Binance would be $50 million. Everything short of that should raise alarm bells.

Money isn't everything. It's about how that money is deployed. And are we really demonstrating innovation, or… we’re just in fact subsidizing a lot of bad projects. Pretending that we have to convince very domestic investors, and only very domestic investors are going to invest in our companies.

The onus falls on the federal government to deliver a clear and consistent regulatory framework that gives investors the certainty they require. They just need a mechanism to make it easier for foreign VCs to invest in Malaysian startups. They must promote Malaysia aggressively to attract blockchain investment. If not, the money will flow elsewhere.

Blockchain Jobs: Skills Gap or Opportunity?

Finally, the third data point: the number of blockchain-related jobs. This is where the rubber really meets the road. No regulatory environment or VC dollars can make up for the absence of talent. Without talented people who can develop and maintain blockchain applications, all of that innovation will do you zero good.

Malaysia has a hidden advantage. We have the biggest, youngest and most tech-connected population. A significant skills gap exists. We need to bridge that gap now.

What's the unexpected connection? Think about the Malaysian diaspora. There are thousands of other talented Malaysians working in the tech industry across the world. We can’t just wait for them to move—we have to recruit them back home.

We can attract them with competitive salaries, a supportive work environment, and the chance to work on exciting, cutting-edge projects. And we can continue to incentivize firms to develop and hire local talent.

Hypothetically, let’s say we already have 1,000 blockchain-related jobs. A more credible immediate goal in the wake of the Binance meeting would be 5,000 in two years. Quality is key.

What we need is to invest in long-term education and training programs. Only then can we help Malaysians develop their skills to be the industry leaders in blockchain technology. This ranges from understanding fundamental coding skills to understanding advanced concepts in cryptography and smart contract development. We will have to work centrally with universities and vocational schools to develop the right, relevant curricula. And we must offer scholarships and grants to ensure these emerging programs are open to all.

The government needs to:

The time for talk is over. It's time for action. Keep a keen eye on these metrics. Recalibrate as required, and we’ll find out soon if smart Malaysia can make this bet pay off and beat the house! Otherwise, we risk the continuing cycle of missed opportunities. The choice is ours.

  • Streamline regulations: Reduce red tape and provide clear guidelines for blockchain businesses.
  • Incentivize investment: Offer tax breaks and other incentives to attract foreign VCs.
  • Invest in education: Fund blockchain training programs and attract Malaysian talent back home.

The time for talk is over. It's time for action. Monitor these data points, adapt strategies as needed, and let's see if Malaysia can turn this gamble into a winning hand. Otherwise, this will be yet another missed opportunity. The choice is ours.