Malaysia's 5 digital banks open! Crypto to benefit from Anwar's policy dividends in 2026

Malaysian five licensed digital banks have been fully launched by 2025, marking the country’s shift toward a more inclusive and technology-driven financial ecosystem, offering high-yield savings accounts with 3% to 4% annual interest rates. Prime Minister Anwar Ibrahim stated that the government is considering formulating policies to formally recognize cryptocurrencies and blockchain technology, emphasizing the rapid development of digital finance. Malaysia must accelerate its pace, paving the way for the legalization of cryptocurrencies in 2026.

Five Digital Banks Reshape the Financial Landscape

All five licensed digital banks were fully launched in 2025, reshaping Malaysia’s digital financial landscape. GX Bank first appeared in 2023, followed by Aeon Bank and Boost Bank entering the market in 2024. KAF Digital Bank began operations on August 8, 2025, after receiving approval from Bank Negara Malaysia (BNM). Supported by the Yang Zhi Li Group and Singapore’s Sea Ltd, the nation’s first AI-driven digital bank, Ryt Bank, started operations on August 25, 2025.

These fully digital, branchless banks are attracting attention and laying the foundation for a more competitive and inclusive financial ecosystem. From high-interest “secure savings accounts” to reward points and other offers, many digital banks offer rates that are highly competitive in the market, around 3% to 4% annually. In contrast, traditional banks in Malaysia typically offer fixed deposit rates of only 2% to 2.5%, making high-yield digital banking advantages apparent.

Aeon Bank and GX Bank have also signed cooperation agreements with insurance companies to serve groups underserved by traditional markets. Industry insiders say that digital banks are now shifting focus to corporate accounts, sparking a wave of services tailored specifically for micro, small, and medium enterprises (MSME) and large corporations. This shift means digital banks are no longer just serving individual customers but expanding into corporate financial services, providing digital solutions for B2B payments, supply chain finance, and cross-border remittances.

Features of Malaysia’s Top Five Digital Banks

GX Bank: Launched in 2023, offers high-yield savings and reward points, largest user base

Aeon Bank & Boost Bank: Launched in 2024, collaborating with insurance companies to expand inclusive finance

KAF Digital Bank: Opened in August 2025, focusing on corporate accounts and MSME services

Ryt Bank: The nation’s first AI-driven digital bank, supported by Yang Zhi Li Group and Sea Ltd

These digital banks are also breaking down barriers for rural communities and gig economy workers. AI-driven analytics enable financial solutions to be delivered with speed and accuracy unattainable by traditional banks. For groups previously rejected by traditional banks due to lack of credit records or stable income, digital banks assess creditworthiness using alternative data, offering them financial access.

Prime Minister Anwar Pushes for Cryptocurrency Legalization

Malaysian Prime Minister Anwar Ibrahim stated earlier this year that the government is considering establishing a policy that, if implemented, will officially recognize cryptocurrencies and blockchain technology in Malaysia. Anwar said, “Digital finance is developing rapidly,” and added that Malaysia must accelerate to avoid being left behind in the old financial system. This clear support from the highest leadership provides strong backing for Malaysia’s cryptocurrency policy breakthrough in 2026.

To support this direction, Malaysia has launched a Digital Asset Innovation Center to encourage financial innovation within a regulatory framework. This innovation hub provides a sandbox environment allowing fintech companies and blockchain startups to test new products and services in a controlled setting. Similar regulatory sandboxes in Singapore and Hong Kong have proven highly successful, balancing consumer protection with fostering innovation. Malaysia’s emulation demonstrates its open attitude toward digital finance and cryptocurrencies.

The global cryptocurrency market is expected to continue upward momentum next year. In Malaysia, this outlook is reflected in growing public interest, increasing institutional participation, and renewed policy discussions. Malaysia’s banking and financial system shows strong resilience, largely unaffected by recent downturns in the cryptocurrency market. This risk resistance provides a stable foundation for deeper crypto integration in 2026.

Increased institutional involvement is a key indicator. Over the past two years, major financial institutions and tech companies’ attitudes toward cryptocurrencies have shifted from cautious observation to active participation. If digital banks are permitted to offer crypto-related services, they will provide retail investors with compliant and convenient investment channels. Such bank-grade crypto services will significantly lower investment barriers and risks, promoting mainstream adoption of cryptocurrencies in Malaysia.

Deep Integration of Digital Banks and Government Measures

Beyond personal banking, Malaysia’s digital banks are increasingly integrating their services with government initiatives. Most industry insiders believe this will help distribute subsidies and cash aid more efficiently and fairly, providing alternatives to traditional channels such as current e-wallets or MyKad-based systems. This government-digital bank synergy opens up possibilities for innovation in the financial ecosystem by 2026.

The branchless nature of digital banks allows them to reach remote areas at minimal costs. Rural communities and gig economy workers, who previously had difficulty accessing financial services, can now open accounts, save, and borrow through smartphones. This inclusive finance not only enhances financial inclusion but also injects momentum into Malaysia’s overall economic development. As more people gain access to financial services, consumption and investment will grow, creating a positive cycle.

AI-driven analytics are core to the competitive advantage of digital banks. Ryt Bank, as the nation’s first fully AI-driven digital bank, demonstrates this potential. AI can analyze customer spending patterns, income fluctuations, and credit behavior in real time, providing personalized financial advice and product recommendations. This level of precision and speed surpasses what traditional banks can do with manual reviews. Additionally, AI can effectively identify fraud and risky transactions, enhancing system security.

Three Possible Paths for 2026 Cryptocurrency Policy

Looking ahead to 2026, Malaysia’s cryptocurrency policy may follow three paths. The most optimistic scenario involves the government officially recognizing cryptocurrencies as a legitimate asset class, with digital banks authorized to offer crypto trading, custody, and lending services. This would position Malaysia as one of Southeast Asia’s most friendly crypto jurisdictions, attracting blockchain companies and capital inflows. The existence of the Digital Asset Innovation Center provides a technical platform for such policy breakthroughs.

A moderate scenario involves gradual opening. The government might initially allow selected digital banks to pilot crypto services within a regulatory sandbox, and then expand more broadly once models are proven. This cautious approach balances innovation with risk control, aligning with Malaysia’s traditional conservative regulatory style. The experience and data accumulated during these pilots will inform subsequent policy development.

A conservative scenario maintains the status quo. If the global crypto market crashes or faces major scandals in 2026, the Malaysian government might delay legalization efforts. However, given Prime Minister Anwar’s clear stance and the establishment of the Digital Asset Innovation Center, this scenario is less likely. A more probable development is that even amid global volatility, Malaysia will continue to advance crypto policies at a slower pace.

Regardless of the path chosen, the full operation of five digital banks lays the infrastructure for financial innovation in 2026. Once the banking system has completed digital transformation, integrating crypto services will face significantly fewer technical barriers. Malaysia is standing at the dawn of the digital financial era, and 2026 will be a critical year to test its strategic choices.