Luno, Kenanga and Halogen Push Malaysia’s Tokenised Finance Into the Settlement Layer

Three regulated financial market players in Malaysia are exploring a fully reserved, ringgit-pegged stablecoin for settling tokenised money market funds, pushing the country’s digital asset experiment from putting investments on blockchain rails to figuring out how the cash leg of those transactions should move.

Luno Malaysia, Kenanga Investors and Halogen Capital said today they plan to explore UMYR, a proposed digital settlement instrument backed one-for-one by ringgit held onshore in a segregated account with a regulated banking partner. The initiative was announced at the Luno Institutional Digital Asset Conference in Kuala Lumpur.

The agreement, however, records only the companies’ commercial intent to collaborate. Any rollout will depend on regulatory engagement and definitive agreements.

That distinction is important. Luno is registered with the Securities Commission Malaysia as a recognised market operator for a digital asset exchange, while Kenanga Investors and Halogen hold capital markets services licences. Their regulated status does not amount to regulatory approval for UMYR.

The Missing Cash Leg

The proposed structure targets a problem that becomes more visible as traditional investments move onto distributed ledger infrastructure.

Kenanga and Halogen would use UMYR to settle subscriptions and redemptions in tokenised money market funds. Luno would issue and redeem the stablecoin through a dedicated, ring-fenced entity, minting tokens only against ringgit received and burning them when ringgit is paid out. Only approved institutional wallets would be allowed, with reserves reconciled daily and independently attested. Retail investors would not participate in the initiative.

The purpose is real-time delivery-versus-payment, or DvP, where movement of the investment and movement of the money used to pay for it are linked. It helps reduce the timing gap and settlement risk that arise when the asset and cash legs pass through separate systems.

That is what makes the proposal more consequential than another stablecoin announcement.

Malaysia has already started tokenising the asset side of financial markets. Kenanga launched Myrra in February on the Stellar blockchain, initially tokenising the Kenanga Money Market Fund and Kenanga Islamic Money Market Fund. Each digital token represents an underlying fund unit.

In April, Khazanah Nasional and the Securities Commission priced Malaysia’s first tokenised sukuk, or Islamic bond, a RM100 Mn issue under Khazanah’s Sukuk Danum programme. The pilot tested distributed ledger technology in the domestic debt market while keeping the underlying sukuk within Malaysia’s existing capital market framework.

The next problem is settlement. A tokenised fund can still depend on conventional payment rails when investors subscribe or redeem. UMYR attempts to put both sides of the transaction onto compatible digital infrastructure.

Three Forms of Digital Money, No Clear Winner Yet

UMYR is not Malaysia’s first experiment with ringgit-based digital money.

Bank Negara Malaysia (BNM) has already admitted three institutional projects into its Digital Asset Innovation Hub. Standard Chartered Malaysia and Capital A are testing ringgit stablecoins for B2B settlement. Malayan Banking Berhad (Maybank) is testing tokenised deposits for payments. And CIMB is testing tokenised deposits for settlement of tokenised securities.

Those projects give Malaysia several potential ways to settle tokenised assets.

A commercial bank can represent deposits digitally. A private issuer can create a fully reserved stablecoin backed by money held with a bank. Further ahead, the central bank could provide wholesale digital money directly to financial institutions.

BNM has not selected one model. Its 2026 testing programme will examine wholesale domestic and cross-border payment use cases, including settlement of tokenised assets. The Malaysian central bank said the work would also feed into possible future integration with its existing research on wholesale central bank digital currency.

The bank has said it intends to provide greater policy clarity on ringgit stablecoins and tokenised deposits by the end of 2026. It is also continuing Project Mawar, its work on wholesale central bank digital currency and distributed ledger technology for more efficient settlement.

UMYR, therefore, enters a market where the basic architecture remains unsettled.

Its proposed model differs from a tokenised bank deposit because a ring-fenced Luno entity would issue the instrument, backed by ringgit held with a banking partner. The attraction is potentially faster programmable settlement across tokenised products. The harder questions concern regulation, redemption, transaction finality and how a private settlement token would interact with Malaysia’s banking and payment infrastructure.

Regulators Stick to Existing Rules

Malaysia’s approach so far has been to experiment with new technology without treating tokenisation as a way around conventional financial regulation.

The Securities Commission said in its 2025 consultation on tokenised capital-market products that securities represented using distributed ledger technology would remain subject to the same securities laws and guidelines as conventional capital-market products. Under its current guidance, firms planning to offer such products are expected to show the regulator how they will manage the added risks, from legal enforceability, transaction finality and ownership records to cybersecurity, custody and money laundering.

That matters for the UMYR proposal because two regulatory questions intersect. The funds being settled remain capital market products under the Securities Commission’s remit, while BNM is simultaneously developing policy around tokenised money, ringgit stablecoins and wholesale settlement.

The three companies have not said that UMYR has been admitted to BNM’s Digital Asset Innovation Hub. Their announcement instead says further participation depends on regulatory engagement.

That leaves UMYR as a private-sector proposal entering a regulatory system that is still deciding how different forms of digital money should connect to tokenised securities and funds.

Kenanga Builds across the Digital Asset Stack

For Kenanga, the collaboration fits a broader strategy that has accelerated over the past year.

The investment bank led Halogen Capital’s RM13.3 Mn funding round in December 2025 alongside 500 Global and other investors, taking a 14.9% stake and becoming its largest institutional shareholder. The investment was intended to support tokenisation across unit trusts, bonds, sukuk, private credit and real estate.

Halogen had around RM400 Mn in AUM as of November 2025 across eight wholesale funds and private mandates and served high-net-worth individuals, family offices, corporate houses and institutional investors.

Kenanga then increased its ownership of Kinetic DAX, or KDX, to 81.7% from 19% in March 2026, turning the Securities Commission-licensed digital asset exchange into a subsidiary. Kenanga describes KDX as Malaysia’s first bank-backed digital asset exchange.

Together with Myrra and its investment in Halogen, that gives Kenanga positions across digital-asset trading, tokenised investment products and asset management. The proposed UMYR collaboration would extend that strategy into settlement infrastructure, although the Luno entity would issue the stablecoin if the project proceeds.

The pieces are increasingly connected.

Malaysia now has tokenised money market funds, a tokenised sukuk pilot, bank-led experiments with tokenised deposits, a B2B ringgit-stablecoin pilot inside BNM’s innovation hub and a separate private proposal to use a fully reserved stablecoin for settling investment funds.

The significance lies less in any one token than in what those experiments are beginning to test together.

Tokenising a fund, bond or sukuk is only one part of creating a digital capital market. The market also needs money that can move against those assets, legal certainty over settlement, regulated custody, reliable redemption and enough liquidity for institutions to use the infrastructure at scale.

UMYR is one proposed answer to the cash side of that equation. Maybank and CIMB are testing another through tokenised bank deposits, while BNM continues to explore where wholesale central bank digital money could eventually fit.

Malaysia has not yet decided which model will prevail. But the debate is moving beyond whether traditional assets can be represented on a blockchain. The critical question now is what form of regulated digital money will settle them.