The accelerating convergence of
quantum computing, artificial intelligence (AI), and stablecoin technologies
has placed Malaysia’s financial sector at a crossroads. These innovations
promise efficiency, speed, and inclusion but they also introduce unprecedented
vulnerabilities that could destabilise the nation’s economy and sovereignty.
As financial crimes become more
sophisticated, borderless, and automated, the idea of creating a national
intranet: a semi-closed digital ecosystem similar to China’s “Great Firewall”
or its “national internet” is gaining quiet traction in security circles.
The question is not simply
technological but existential: can Malaysia afford to remain open in a world
where cyber and financial terrorism can paralyse an economy in minutes?
To understand why this debate
matters, one must first appreciate the growing complexity of financial
terrorism. Unlike traditional terrorism, which relies on physical violence, financial
terrorism weaponises economic systems by using cyberattacks, digital
currencies, and AI-driven market manipulation to destabilise states, erode
public trust, and drain national wealth.
In recent years, Malaysia has
seen an uptick in cyber-fraud, cryptocurrency scams, ransomware, and data
breaches targeting banks and government agencies. These incidents are no longer
isolated criminal acts but components of larger, transnational networks that
leverage advanced technologies to infiltrate financial infrastructure.
The quantum threat compounds this
danger. Google’s Willow quantum chip and its “verifiable quantum advantage”
have demonstrated that we are nearing an era where quantum computers can
perform calculations thousands of times faster than current supercomputers. As
LevelBlue’s research warns, this capacity could render traditional encryption
obsolete, enabling actors to decrypt sensitive financial or governmental
communications.
For Malaysia’s financial system
which is anchored on classical cryptographic protocols represents an
existential vulnerability. If foreign or non-state entities develop quantum
capabilities before Malaysia upgrades its defences, the consequences could be
catastrophic: stolen financial data, disrupted payment systems, and
manipulation of central-bank operations. The line between cybercrime and
economic warfare would disappear overnight.
Simultaneously, stablecoins: digital
assets pegged to fiat currencies are revolutionising cross-border finance.
Their efficiency and low transaction costs have attracted legitimate businesses
and investors, but they have also become tools for illicit finance.
According to TokenAlphabet,
stablecoins now account for hundreds of billions in global market value, with
vast daily transaction volumes moving largely outside traditional banking
oversight. The Brookings Institution has warned that this decentralised ecosystem
creates blind spots for regulators and threatens national monetary sovereignty.
For Malaysia, where the financial
system relies on controlled capital flows and currency stability, uncontrolled
stablecoin use could open backdoors for money laundering, sanctions evasion,
and terrorist financing.
Moreover, the integration of AI
into the global financial ecosystem adds another layer of volatility. AI-driven
bots can manipulate financial markets, generate deep-fake investment schemes,
and execute large-scale phishing or identity-theft campaigns.
Worse still, AI can automate the
entire criminal process from identifying potential victims to laundering
proceeds via crypto exchanges that leaving little human trace. Malaysia has
already witnessed AI-assisted scams targeting small investors through social
media platforms, often linked to overseas operators.
When such AI tools combine with
quantum computing’s decryption capabilities and the anonymity of stablecoins, a
new type of financial terrorism emerges: invisible, instantaneous, and highly
coordinated.
Given these converging threats, I
strongly contend that Malaysia should explore developing its own national
intranet, modelled after China’s system. While China’s Great Firewall is
frequently criticized for its censorship practices, its core infrastructure
fulfils a broader strategic objective by ensuring national cyber-sovereignty.
By routing domestic traffic
through state-controlled gateways, China can monitor data flows, filter foreign
content, and isolate its digital infrastructure from external attacks. This
structure gives Beijing a high degree of resilience against foreign cyber-intrusions
and financial manipulations, while allowing rapid control during crises.
Could Malaysia adopt a similar
approach, tailored to its democratic and open-market context?
In theory, a Malaysian intranet
could act as a defensive barrier around the country’s financial and
governmental networks. Domestic financial institutions, payment gateways, and
e-government systems could operate within a closed, high-security environment,
shielded from the global internet’s volatility.
External connections could be
strictly regulated, passing through quantum-resistant encryption and monitored
exchange nodes. Such an architecture would reduce exposure to ransomware
attacks, foreign data breaches, and stablecoin-based financial terrorism.
However, this strategy comes with
profound trade-offs. Malaysia’s economy is highly dependent on global
connectivity particularly in trade, digital services, and finance. Implementing
a China-style intranet risks fragmenting the digital ecosystem, deterring
foreign investors, and stifling innovation in fintech and AI.
Unlike China, Malaysia lacks the
scale and domestic tech ecosystem to fully localise its digital economy. A
rigidly closed intranet might inadvertently isolate Malaysia from international
capital markets and innovation flows, undermining its goal of becoming a
regional digital hub.
That said, a hybrid model, a
“sovereign digital firewall” that could offer a pragmatic compromise. Instead
of a total intranet, Malaysia could establish segmented, sovereign networks for
critical sectors such as banking, telecommunications, energy, and government
data.
These sectors would operate under
quantum-resistant, AI-secured private networks, with regulated gateways for
international transactions. This would enable continuous economic interaction
while ensuring that Malaysia’s most vital financial systems remain insulated
from external shocks.
In addition, real-time blockchain
monitoring tools, AI-driven anomaly detection, and cross-agency
cyber-intelligence centres could enhance resilience without closing the
nation’s digital borders.
The geopolitical context further
strengthens the argument for greater digital sovereignty. Southeast Asia has
become a battleground for cyber-espionage, financial manipulation, and data
exfiltration by both state and non-state actors. Quantum-ready nations or
crypto-enabled terrorist networks could exploit Malaysia’s open internet
architecture to infiltrate financial systems or destabilise markets.
Financial terrorism, unlike
conventional warfare, does not require armies or weapons but it requires
access, algorithms, and unguarded digital infrastructure. In this environment,
an intranet or sovereign digital firewall becomes not a symbol of isolation,
but of self-defence.
Malaysia must also frame this
within a broader national security doctrine. The protection of financial
sovereignty can no longer be confined to central-bank regulation or cyber-law
enforcement as it must be integrated into national defence planning.
To mitigate such risks, Malaysia
should establish a National Cyber-Financial Security Council that unites NACSA,
Bank Negara Malaysia, the Ministry of Finance, the Armed Forces Cyber Command,
and key private-sector partners.
This council would coordinate
real-time intelligence sharing, set and monitor national encryption standards,
and conduct simulations of quantum-enabled financial attacks to evaluate and
strengthen the country’s preparedness.
Yet technology alone will not
suffice. Malaysia must cultivate domestic capabilities. Relying solely on
foreign vendors for cybersecurity infrastructure exposes the nation to
strategic dependency. Investing in post-quantum cryptography research, AI ethics,
and blockchain forensics within Malaysian universities and startups will create
the foundation for long-term digital resilience.
Ultimately, Malaysia’s challenge
is to strike the delicate balance between openness and sovereignty. A closed
intranet like China’s may be too blunt a tool for a democratic, trade-dependent
nation, but complete openness is untenable in an age of quantum-enabled
financial terrorism.
The future likely lies in managed interconnectivity, a national digital architecture that remains globally linked but domestically fortified. In this new era, the front line of national defence is not at the border but it is at the firewall.
30.10.2025
Kuala Lumpur.
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