A blockchain lets several participants maintain a shared history of transactions under agreed rules. It can change how they check and update a record. It does not itself inspect goods, turn a token into legal ownership or make an arrangement Shariah-compliant. If one trusted organisation can run the records well, a normal database may be enough.
Start with a payment and a receipt
When you transfer ringgit from your bank account, a payment system and bank records tell the parties what was paid. A blockchain-based transfer instead updates the relevant network’s ledger. The useful question is what that update actually transfers: a native cryptoasset, a claim on an issuer, or merely information. A ringgit bank payment and a token transfer can be separate events.
A ledger is a transaction record. A blockchain groups transactions into blocks linked by cryptographic fingerprints, called hashes. Network participants check transactions against its rules and agree on the accepted history, a process called consensus. Different networks use different methods. The result is a record designed to reveal and resist alteration; “impossible to change” is too strong.
Blockchain Technology Overview (October 2018) · The tokenisation continuum (11 April 2023)
Who controls the record?
In a conventional design, users send instructions to an organisation that controls the main database. Copies and backups can still exist. In a shared-ledger design, several computers maintain and check the agreed record. Sharing copies does not mean every customer can approve transactions, or that there is no powerful operator.
A permissioned network restricts participation to admitted people or organisations; reading, submitting and validating can have different permissions. On a public permissionless network, participation is generally open under the protocol’s rules, but running a validator or publishing blocks can require resources. A service that gives you access can impose identity checks even when the underlying network is open.
Blockchain Technology Overview (October 2018)
One database and a shared ledger
Conceptual comparison; neither design removes the need for governance.
One organisation controls the main record
- Users submit requestsFarah, Kumar and warehouse staff send instructions.
- Operator checks and updatesIts database, access rules and audit trail record the change.
- Users receive a resultCopies or backups can exist; accountability remains with the operator.
Several admitted organisations share a record
- Users submit signed requestsExample: Farah requests transfer of a receipt token.
- Participating computers validateWarehouse, seller-side and buyer-side participants apply agreed network rules.
- Accepted history is replicatedEach participating record is updated; admission and dispute rules still matter.
Reading the diagram: Read each column from top to bottom. The first relies on one record operator; the second uses agreed checks across admitted participants. Users and validators need not be the same people.
A fictional Malaysian warehouse transfer
Imagine Farah stores 100 bags of rice at a warehouse and sells the agreed receipt rights to Kumar. One token is intended to represent the whole batch, not one bag. The parties agree a fictional RM10,000 price, paid through a separate bank transfer. These quantities and people illustrate a workflow; no real warehouse product or legal effect is asserted.
Farah owes the rights she has agreed to transfer; Kumar owes the agreed payment. The warehouse must follow its actual storage and release agreement. Before any token is issued, someone must check the batch exists, its quality, who may transfer it and whether another claim already affects it. The network cannot visit the warehouse.
A digital signature proves that the relevant signing key authorised a message under the system’s checks. It does not alone prove that its user is the lawful owner of the rice. A private key is secret signing information; whoever controls it can authorise relevant network actions. Secure keys and reliable identity mapping remain necessary.
Blockchain Technology Overview (October 2018) · The tokenisation continuum (11 April 2023)
A transaction from request to record
Fictional: 1 token represents 100 rice bags; RM10,000 paid separately through a bank.
Token-record path
- Farah signs a transfer requestThe signing key authorises a message to transfer the token to Kumar’s address.
- Network applies its rulesCheck signature and available token; a valid request can still contain false outside data.
- Record is accepted and sharedAfter the required consensus/finality conditions, Kumar’s address is recorded as holding the token.
Separate payment and goods path
- Kumar pays Farah RM10,000Bank payment confirmation is outside this ledger model.
- Parties reconcile both eventsA token update alone does not prove the bank payment completed.
- Warehouse releases goods under the agreementDelivery and enforceable rights need off-chain checks and documents.
Reading the diagram: The two columns are separate paths, not guaranteed simultaneous transfers. A rejected network request does not update the token record; a failed bank payment needs the agreed recovery process.
The token and the rice are different things
The ledger may now show Kumar’s address holding the token. The bags remain in the warehouse. Kumar’s right to collect them depends on the issued receipt, transfer agreement, custody arrangements and applicable law. A copied or forged receipt, double claim, damaged goods or failed custodian remains a real problem even if the token history is accurate.
When the goods are collected, the token and warehouse records need a coordinated closing process so the same batch is not represented as available again. This is a design requirement in our fictional model. We have not examined a signed Malaysian warehouse receipt, liens, insurance or dispute documents, so this guide does not establish an enforceable right to any real goods.
The tokenisation continuum (11 April 2023) · Asset Tokenisation in the Malaysian Financial Sector (October 2025 discussion)
The record and the real asset
Fictional warehouse model: the token, goods and rights must remain connected.
On the ledger
- Token identifier and holder addressShows the accepted digital record and transfer history.
- Transfer or closing updatePrevents reuse of the same representation only if the system and processes work as designed.
Connections that people must maintain
- Issuer and data checkerMatch one token to the identified batch and check quantities and competing claims.
- Signed terms and identityLink an address to a person and specify transfer, redemption and dispute rights.
Outside the ledger
- Warehouse holds 100 rice bagsQuality, damage, storage charges and actual release still need attention.
- Delivery and enforcementA custodian, bank or dispute body must perform its actual obligations.
Reading the diagram: Follow the three groups in reading order: digital record, connecting people/documents, then physical goods and enforcement. On narrow screens the groups can stack vertically. A record does not by itself create legal title.
What a smart contract can automate
A smart contract is a program that performs specified actions when its coded conditions are met. In the warehouse model it could prevent a token transfer until an authorised payment-confirmation message arrives. The person or system supplying outside information is often called an oracle. A false confirmation can still trigger the wrong result; the program follows its inputs and code.
Atomic settlement means linked transfers happen together, or neither happens, within the supported arrangement. It can reduce the risk that one side transfers while the other fails. Our separate bank payment and token transfer are not automatically atomic. A program’s name does not make it a legally enforceable contract, settle disputed rights or give it Shariah approval.
Innovation and the future of finance (event 20 April 2023) · Blockchain Technology Overview (October 2018) · Asset Tokenisation in the Malaysian Financial Sector (October 2025 discussion)
Costs, limits and when a database is enough
Compare the whole operation: record maintenance, integration with banks and warehouses, security, inspections, custody, dispute handling and user support. Public networks can also charge network processing fees. The person who pays and the amount depend on the implementation; this guide assumes no fee rate or cost saving. Not every blockchain uses energy-intensive mining.
Ask whether several independent parties genuinely need to maintain a common history. If one accountable organisation can reliably manage the job, a database with access controls and an audit trail may be simpler. If parties need a shared ledger, compare governance, privacy, capacity and correction processes before choosing a blockchain. This is an editorial design comparison, not a claim that either system always wins.
Blockchain Technology Overview (October 2018) · Asset Tokenisation in the Malaysian Financial Sector (October 2025 discussion)
What is actually being tested in Malaysia?
BNM’s DAIH page, with initiatives updated on 30 July 2026, names ringgit stablecoins for business-to-business settlement, tokenised deposits for payments and tokenised deposits for settlement of tokenised securities. These are controlled innovation initiatives, not evidence that every reader can open a retail account for them.
The FAQ says admission does not guarantee regulatory recognition, and a live launch requires further BNM assessment. Participation is for regulated financial institutions, fintech companies and other Malaysian-incorporated entities developing relevant solutions; foreign entities can participate through Malaysian partnerships. It is not a public consumer application scheme. BNM’s October 2025 discussion paper expressly does not prescribe definitive regulatory positions.
Digital Asset Innovation Hub (DAIH) (update 30 July 2026) · Asset Tokenisation in the Malaysian Financial Sector (October 2025 discussion)
Muslim and non-Muslim participation
The warehouse story applies the same operational questions to Farah and Kumar; religion does not change the ledger’s checks. Actual access depends on the network’s admission rules, service conditions and applicable law. A Muslim reader seeking Shariah compliance also needs to check the asset, contract and activity. A technology label supplies none of those decisions.
For a real consumer service example, Luno Malaysia’s terms specify age 18 or above, capacity, use of your own account and identity verification. The examined eligibility and verification sections do not specify a Muslim-only condition. That limited observation does not promise account acceptance or every service’s availability.
Luno Malaysia Terms of use (updated 14 May 2026) · Asset Tokenisation in the Malaysian Financial Sector (October 2025 discussion)
Before relying on a token record
- What exactly does the token represent, and who issued it?
- Who checks the goods or outside data, and who pays for that check?
- Who controls the signing keys, admits participants and corrects errors?
- Are the payment and asset transfer coordinated? What happens if one fails?
- Which signed documents give you rights to delivery, redemption or compensation?
- What are the total fees, custody risks, privacy limits and dispute routes?
Read next
References
Sources checked on 6 October 2026, Malaysia time. Technical foundations use NIST’s 2018 overview; tokenisation discussion credits the named BIS authors and Waller’s speech. BNM’s October 2025 paper is exploratory, while the DAIH page contains a July 2026 initiative update. The warehouse story and design comparisons are editorial models, not findings about a Malaysian product. External documents remain with their issuers.
- Blockchain Technology Overview (October 2018)NIST; Dylan Yaga, Peter Mell, Nik Roby and Karen Scarfone · October 2018; NISTIR 8202Sections 2–4, 6–8
- The tokenisation continuum (11 April 2023)BIS; Iñaki Aldasoro, Sebastian Doerr, Leonardo Gambacorta, Rodney Garratt and Priscilla Koo Wilkens · 11 April 2023; BIS Bulletin 72pp. 1–6; platforms, ramps and legal challenges
- Innovation and the future of finance (event 20 April 2023)Christopher J Waller, Federal Reserve Board; hosted by BIS · Speech event 20 April 2023; BIS metadata 26 April 2023Tokenization; programmable transfers and atomic settlement
- Digital Asset Innovation Hub (DAIH) (update 30 July 2026)Bank Negara Malaysia · Initiatives updated 30 July 2026; FAQ undatedIntroduction; initiatives; FAQ 1, 2 and 4
- Asset Tokenisation in the Malaysian Financial Sector (October 2025 discussion)Bank Negara Malaysia · October 2025 discussion paperForeword; 4.3(ii), 5.28–5.30, 5.45
- Luno Malaysia Terms of use (updated 14 May 2026)Luno Malaysia Sdn Bhd · Last updated 14 May 2026; separate effective date not statedSections 3, 6, 7, 13–16