Quantum Coins And Code The New Crime Frontier

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Malaysia stands at a critical juncture in the evolving digital landscape, where three converging technologies - quantum computing, stablecoins, and artificial intelligence are reshaping not only the global economy but also the very nature of crime.
These forces, each revolutionary in their own right, are colliding to produce a perfect storm of vulnerabilities.
As Malaysia continues to pursue its national digitalisation agenda, it must also confront the darker implications of this technological convergence: the rise of transnational cybercrime, illicit finance, and data manipulation.
The challenge now is not just to innovate but to safeguard.
The most immediate technological shock comes from Google’s unveiling of its Willow quantum chip, which recently demonstrated a verifiable quantum advantage - where it performed a specific computation far faster than any classical supercomputer could manage.
While the experiment was highly specialised, the implications ripple across global security systems.
As explained by LevelBlue’s cybersecurity analysts, the emergence of Willow and its underlying Quantum Echoes algorithm signals that existing encryption standards like the Rivest-Shamir-Adleman public-key cryptosystem (RSA), Elliptic-Curve Cryptography (ECC), and others could eventually be rendered obsolete.
Updated encryption matters
Encryption underpins nearly every layer of digital trust in Malaysia, ranging from online banking, telecommunications, healthcare databases, and even classified government networks.
A future where quantum machines can break those codes in seconds is not just theoretical but existential.
This quantum breakthrough introduces a new category of criminal opportunity. A sufficiently powerful quantum system could decrypt financial records, access confidential state documents, or compromise biometric data at an unprecedented scale.
Malaysia’s banks, government agencies, and critical infrastructure operators would become attractive targets for quantum-enabled adversaries.
Even before full quantum decryption becomes practical, the anticipation of its arrival could trigger criminal innovation.
For instance, data theft today may be aimed at “store-now, decrypt-later” attacks where criminals stealing encrypted information now, waiting until quantum computing matures enough to unlock it.
The Malaysian government’s current cybersecurity framework, built largely on classical assumptions, must be urgently recalibrated toward quantum-resilient cryptography. Without such foresight, Malaysia risks becoming a soft target in the emerging post-quantum order.
Stablecoins: Future and risks
Parallel to the quantum threat is the explosive growth of stablecoins: digital tokens pegged to fiat currencies like the US dollar.
As highlighted by TokenAlphabet, the market capitalisation of USD-denominated stablecoins now exceeds hundreds of billions, facilitating near-instant cross-border payments.
For legitimate businesses, this promises efficiency. For criminals, it offers near-perfect laundering tools.
Stablecoins enable the movement of large sums of money beyond the visibility of central banks and financial intelligence units, particularly when transacted through decentralised finance (DeFi) platforms or privacy-enhanced protocols.
Hence, Malaysia’s financial crime regulators face a dilemma. On one hand, stablecoins and blockchain innovation support fintech growth and financial inclusion, core goals of the Malaysia’s Digital Economy Blueprint (MyDigital).
On the other, these same instruments are becoming conduits for cross-border money laundering, fraud, and terrorism financing.
The Brookings Institution warns that stablecoins blur the line between private innovation and public risk. They threaten monetary sovereignty, weaken capital controls, and create systemic risks if major issuers fail or are exploited.
For Malaysia, the issue is compounded by proximity to crypto-active neighbours like Singapore and Thailand, where regulatory arbitrage could easily occur.
Criminal syndicates can exploit the cross-border liquidity of stablecoins to move funds through regional exchanges before converting them into local assets, effectively bypassing existing anti-money laundering and “know your customer” controls (popularly known as AML/KYC controls)
The advent of AI
Adding to this volatile mix is AI, which has revolutionised both criminal methodology and defensive capability.
AI is now the tool of choice for cyber-criminals, enabling deep-fake impersonations, automated phishing campaigns, and synthetic identity fraud.
Fraudulent AI-generated investment schemes and romance scams are already proliferating in Malaysia, often combined with crypto-based payments that are difficult to trace.
AI can also enhance cyberattacks by identifying vulnerabilities faster than human analysts or by crafting personalised social-engineering messages.
At the same time, law enforcement agencies are beginning to adopt AI-powered threat detection tools to identify anomalous financial transactions, flag fake news networks, and track cyber-criminal networks across multiple jurisdictions.
The contest is increasingly one of AI versus AI, where the faster system wins.
Triple threat features
These developments are not isolated. The synergy between quantum computing, stablecoins, and AI amplifies criminal potential.
Quantum computing threatens the encryption layer of digital security; stablecoins provide an unregulated channel for value transfer; and AI supplies the intelligence to orchestrate attacks efficiently.
Imagine a future crime syndicate using AI to scan Malaysian networks for vulnerabilities, stablecoins to launder the proceeds instantly across borders, and quantum power to decrypt stolen data for blackmail or market manipulation.
This is not science fiction but a plausible threat model within a decade.
What should M’sia do?
Malaysia’s response, therefore, must be strategic, multi-layered, and forward-looking. The first and most urgent pillar is cryptographic renewal.
The National Cyber Security Agency (Nacsa), Bank Negara Malaysia, the National AI Office (Naio) and other key institutions must accelerate migration to post-quantum cryptography (PQC) algorithms resistant to quantum decryption.
Malaysia should participate in global standard-setting efforts led by the US National Institute of Standards and Technology (NIST) and invest in local R&D to ensure national independence in cryptographic technology.
This is not merely technical housekeeping; it is a matter of digital sovereignty.
Second, Malaysia must regulate and monitor stablecoins with the same rigour applied to traditional banks.
This means imposing full transparency obligations on local crypto exchanges, requiring real-time transaction monitoring, and integrating blockchain analytics into the operations of the Financial Intelligence Unit (FIU).
BNM could also explore issuing a central bank digital currency (CBDC), a regulated “digital ringgit” as a safer domestic alternative to offshore stablecoins. Such a move would reinforce monetary sovereignty while enabling traceable, efficient digital payments.
Third, AI must be weaponised for protection, not exploitation. The police and financial regulators need AI-driven systems that detect behavioural anomalies in transaction networks, flag deep-fake campaigns targeting local users, and identify bot-driven misinformation that undermines social trust.
Collaboration between academia, private industry, and government through initiatives like Malaysia’s AI Roadmap can ensure the country keeps pace with adversarial AI.
Asean must step up
Equally critical is cross-border collaboration. Because cybercrime transcends borders, Malaysia must deepen information-sharing partnerships within Asean and with global agencies such as Interpol, Europol, Aseanapol and the Financial Action Task Force (FATF).
Regional cooperation on crypto-asset tracking and joint investigations will be crucial. Malaysia could also advocate for an Asean framework on quantum-resilient cybersecurity, positioning itself as a thought leader in Southeast Asia.
Finally, Malaysia must undertake legal and institutional reforms. Existing laws like the Computer Crimes Act (1997), the Cybersecurity Act 2024 and the Anti-Money Laundering Act (2001) must be updated to cover quantum-enabled data breaches, AI-generated fraud, and stablecoin-based money laundering.
A specialised National Centre for Quantum and AI Security could coordinate responses across agencies and maintain a unified national threat register.
The rise of quantum chips, stablecoins, and AI marks a profound transformation in the nature of crime: one that blurs the boundaries between cyberspace, finance, and physical security.
Malaysia cannot afford complacency. Each of these technologies offers vast potential for progress, yet without coordinated governance, they could destabilise economic and social order.
To stay ahead, Malaysia must act not reactively but pre-emptively, shaping a digital-security ecosystem that is as adaptive and intelligent as the threats it faces.
The stakes are no longer just technological but they are national. - Mkini
R PANEIR SELVAM is the principal consultant of Arunachala Research & Consultancy Sdn Bhd, a think tank specialising in strategic national and geopolitical matters.
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.

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