Malaysia proposes blockchain identity system to curb fraud

Blockchain is among the technologies that can enhance digital security in Southeast Asia, Malaysia’s Deputy Prime Minister, Datuk Seri Ahmad Zahid Hamidi, says.

Zahid spoke at the Asia International Security Summit and Expo 2025 on January 20, where he called on the region to step up security measures for economic prosperity. With the growth of the digital economy in the region, cybersecurity has become a particularly critical field, with Zahid warning that criminals are now tapping emerging technologies like artificial intelligence (AI) to launch complex attacks.

“While discussions are valuable, execution is imperative. I urge all stakeholders — governments, law enforcement agencies, and industry leaders — to take concrete action in certain key areas,” he stated, as reported by local outlet Malay Mail.

Zahid proposed a national blockchain-powered identity verification system to safeguard digital transactions for the 670 million residents of the fast-growing region. Blockchain could also mitigate against identity fraud, which costs victims billions yearly; in 2023, Americans lost $43 billion to identity fraud.

In Southeast Asia, cases of identity fraud surged by 120% in 2024, according to a report by the verification platform Sumsub. Singapore, Thailand and Indonesia recorded the highest rise, with reported cases tripling last year. Fake IDs and passports, account takeovers and the use of deepfakes were among the most common crimes.

Aside from blockchain, the Malaysian Deputy PM proposed “AI-driven predictive policing and real-time urban surveillance to detect and prevent security threats proactively.”

Zahid also wants ASEAN to launch a Cybercrime Task Force to crack down on the region’s rising digital crimes.

One of the cybercrimes that have shot up in Southeast Asia is pig butchering, in which criminals endear themselves to a victim over weeks—sometimes even months—to extract the maximum amount possible. Research from Chainalysis revealed that pig butchering rings in the region rely on individuals who have been kidnapped, trafficked and forced to conduct these scams.

The scammers lure their victims to invest in bogus digital currency projects or to send them money for “urgent” needs in digital assets. While some use bogus clone websites, others rely on legitimate platforms with lax guardrails like Binance, which was convicted and fined last year by American authorities.

Watch: Why using transparent ledger for digital identity ensures trust

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