This policy wont work for long and people will openly revolt against such bizarre policies, I feel the Malaysian government should instead incentivise people to use digital money instead of curbing fiat money. I dont think we will see a major surge in bitcoin usage because many people dont understand how to use it, and others will prefer to pay via online banking only.
This is an absurd idea that will ultimately prove unpopular with Malaysians as I assume there will be repercussions if they implement it since I understand this will be first in ASEAN.
Now I think this is not an effective solution to combat illicit activities because these offenders will always find a way to circumvent this process! I guess the best way to combat these illegal activities is to strengthen crime detection and law enforcement and impose much harsher penalties and laws that will discourage would be offenders.