• According to a senior Malaysian official, crypto currency should be permitted by the government.
• Although the central bank is considering issuing central bank digital currencies (CBDC), it has yet to comment on these statements.

Zahidi ZainulAbidin, the Deputy Minister of Multimedia and Communications, made an official statement that Malaysia should adopt BTC and other crypto currencies as legal tender during Monday’s appearance before Congress.

Abidin replied to an objection lawmaker by saying, “We hope that the government will allow it.”
The use of BTC as a global store of value or payment instrument has increased. However, this has not been the case with the adoption crypto as legal currency. Only El Salvador has so far committed, prompting strong criticism from International Monetary Funds (IMF), who are concerned about the risks associated with this.

The viability of Salvadoran President Nayib Bukele’s project remains in question. Since its adoption in September, when Bitcoin was declared legal tender, only 14% of businessmen have permitted transactions in BTC, according to a survey of companies carried out by the ‘Chamber of Commerce’ of El Salvador.

The study found that Salvadoran businesses were not attracted by cryptocurrency.

During his speech, Minister Zahidi did not specify the extent of his ministry’s involvement regarding digital assets. The ‘Malaysian Ministry of Communications and Multimedia’ is responsible for overseeing the digital press and broadcasting sectors.

This group coordinates, supervises, and manages telecom companies as well as 5G mobile network operation in the country. It even handles foreign investment management in its technology industry.

Central Bank Study the Launch of The Virtual Malaysian Ringgit

The official explained that, although the regulation of the financial system depends on the ‘Ministry of Finance’, to which the central bank and the securities regulator are attached, “digital financial activities” are also part of the powers of the ‘Ministry of Housing and Local Government’.

The Malaysian issuer is yet to take a formal position on the subject of Bitcoin being adopted as legal tender. Bloomberg News was informed by the Malaysian body in January that they were evaluating the issue of digital currencies (CBDC) from the central banks.

Bank Negara Malaysia is not responding to the comments made by the deputy minister of Communications and Multimedia.

The Flipside

• What is known so far is that in September, the central bank formed a joint project with the Bank for International Settlements, in which Singapore, Australia, and South Africa also participate, called ‘Dunbar‘.
• A shared platform is being used by the aforementioned countries to evaluate CBDCs in international payments.

Why you should care

• Blockchain technology has been promoted by the IMF through fiduciary digital currencies projects that will be competitive with BTC or other cryptos.

Malaysia is not the only country that has been considering adopting BTC legal tender. However, many other countries are also interested in this possibility.

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