Last week, Shah Alam MP Khalid Abdul Samad mooted the Harapan Coin, touted to be the world’s first political initial coin offering (ICO).
Khalid, who is also the Federal Territories minister, said the Harapan Coin will use both cryptocurrency and blockchain technologies. He added that the paperwork is ready for regulatory review. “It is the first digital currency in the world to be utilised as a strategy to win an election, at the same time providing value to the contribution made by like-minded participants,” says the official white paper on the Harapan Coin website.
While the proposed ICO appears well-intentioned, many observers have raised red flags over the past week.
First, does Pakatan Harapan really need to raise funds via a digital currency platform, making it more complex than it needs to be?For perspective, the Tabung Harapan initiative to help reduce public debt was relatively successful, raising nearly RM200 million at the last update, using the existing financial system avenues.
Second, there needs to be more clarity on the real beneficiaries of the ICO. Former prime minister Datuk Seri Najib Razak reportedly said that of the proceeds, 30% will go to the system developer; 30% to Khalid’s Parti Amanah Negara; and the rest to Pakatan Harapan. Is this really so? In any case, the developer should be identified for transparency.
Third, the proposal raises a potential conflict of interest. Khalid has suggested that the Harapan Coin could be used for government transactions but Bank Negara Malaysia had declared in December 2017 that digital currencies are not legal tender.
The government may find that its time and resources are better used to address more pressing bread-and-butter issues.