Malaysia Proposes Blockchain-Powered ID Verification System to Enhance Digital Security in Southeast Asia

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

Malaysia’s Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi has highlighted blockchain technology as a key tool for enhancing digital security in Southeast Asia.

Speaking at the Asia International Security Summit and Expo 2025 on January 20, Zahid called for the region to step up its security measures to ensure economic prosperity. He noted that with the growth of the digital economy, cybersecurity has become a particularly critical field, especially as criminals are now tapping into 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 said, 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. He also suggested that blockchain could help mitigate identity fraud, which costs victims billions annually. For instance, 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 verification platform Sumsub. Singapore, Thailand and Indonesia recorded the highest increase, with reported cases tripling last year. Common crimes included the use of fake IDs and passports, account takeovers, and deepfakes.

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

Zahid further called for 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 known as the “pig butchering” scam, in which criminals endear themselves to a victim over several 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 fraudsters typically lure their victims to invest in bogus digital currency projects or to send them money for “urgent” needs in digital assets. While some use copycat clone websites to carry out the scams, others operate on legitimate platforms with lax guardrails, such as Binance, which was convicted and fined last year by American authorities.

Watch: Why using transparent ledger for digital identity ensures trust