However, if we scale it to the country’s GDP, it was in the range between 6.1 to 6.9% over the past five years. Thus, despite the headway we have made in advancing e-payments, the persistency of cash among the public and small and medium sized businesses remains high. This opens up the economy to risks as cash is still being used by criminals to launder illegal proceeds, as we 3/5  BIS central bankers' speeches  have seen from some high-profile cases over the past year or so. Similarly, this is the preferred mode to finance terrorist activities, which will involve transacting in cash. Therefore, it is timely for us to look at ways to strengthen the controls to mitigate financial crime; namely the cash threshold reporting requirement. When we compare Malaysia with other countries, our current threshold is too high and disconnected from the size of our economy, especially relative to our purchasing power. Hence, it needs to be updated. In this regard, we would like to announce that we will be lowering the daily cash threshold report to RM25,000 effective 1 January 2019. This will bring the cash threshold report in Malaysia to be more at par with other countries. We do not anticipate any impact in terms of economic activity but an increase in effectiveness in taming the black economy that is still heavily reliant on cash transactions.
As such, it is important for the industry to be aware of the trade-offs that come with adoption of these technologies. In pushing the boundaries of innovation, the industry needs to understand the risks that they pose. One example is the rise of mobile banking, e-payments and virtual assets. In Malaysia, mobile banking transactions have multiplied greatly, from around 500 million transactions in 2016 to almost 1.3 trillion transactions in August this year. The ubiquity of mobile internet and increasing dependency on our smartphones is expected to increase the importance of this medium. This technology fosters financial inclusion and offers potential for greater customer engagement. One such potential is in meeting and strengthening know-your-customer requirements. By leveraging on technology, financial institutions will be able to conduct e-KYC with greater efficiency while making the customer experience more seamless. One such solution is being tested in the Bank’s FinTech sandbox. Another area of growth comes from virtual assets. Between the end of 2016 to date, market capitalisation of virtual assets have grown by an extraordinary rate of over 1000% from around USD 20 billion to around USD 200 billion. While the technologies behind virtual assets may present great potential to revolutionise the way we conduct finance, the risks associated with virtual assets is an area that deserves much scrutiny. Features that may allow anonymous or pseudonymous transactions and easier crossborder transfers of values carry money laundering and terrorism financing risks that need to be addressed.