Malaysia should adopt crypto as legal tender, ministry says

If it goes after Malaysia’s communication ministry, the country should follow El Salvador as the next nation to adopt cryptocurrencies as legal tender, Bloomberg News reported.

Zahidi Zainul Abidin, Malaysia’s deputy minister in the communications and multimedia ministry, made the proposal in parliament on March 21.

“We hope the government can allow this. We are trying to see how we can legalise this so that we can develop youth participation in crypto and assist them,” Abidin said.

He added that in case of a formal approval Malaysia’s finance ministry would be responsible for regulating crypto alongside institutions such as the central bank and the securities commission, but did not elaborate how his ministry would be involved in crypto.

No formal stance yet by the central bank

So far, the Malaysian central bank has not laid out a formal stance on the issue, apart from plans to introduce a central bank digital currency. In September last year, the country joined forces with the Bank for International Settlements, Australia, Singapore and South Africa to test the use of central bank digital currencies for international settlements via a shared platform in a project dubbed Project Dunbar.

Malaysia’s finance minister Tengku Zafrul Aziz – who would have a decisive decision power in allowing crypto as legal payment in the country – is so far less bullish on the idea. Earlier in March, he said that crypto is “not a good store of value and a medium of exchange” because of its volatility.

So far, El Salvador is the only country globally to have adopted Bitcoin as legal tender – albeit with mixed success. A survey of companies by the Central American nation’s chamber of commerce published earlier this month found that just 14 per cent had transacted in Bitcoin since September last year, when El Salvador recognised the world’s leading cryptocurrency as legal tender.

Majority of global countries allow crypto use and trade

A number of countries and territories, including the European Union, Canada, the US, Mexico, most of Latin America, India, Pakistan, all of Southeast Asia, Japan, South Korea, Australia, New Zealand, South Africa, Nigeria, Tanzania, Angola, Namibia, most of Middle East and Western and Central Asian countries, as well as Russia and Ukraine, have legalised the use and trade of cryptocurrencies fully or with certain restrictions such as a banking ban but stopped short of adopting them as legal tender, instead only providing a regulatory framework for digital assets.

Crypto is currently explicitly forbidden in China, North Korea, Bangladesh, Nepal, Bolivia, Algeria, Morocco and Egypt.

UPDATE: On March 24, Malaysia’s deputy finance minister Mohd Shahar Abdullah said in parliament that the government has no intention to recognise cryptocurrencies as legal tender in the country.

“Cryptocurrencies like Bitcoin are not suitable for use as a payment instrument due to various limitations including price swings and exposure to cyber threats,” he said.



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If it goes after Malaysia’s communication ministry, the country should follow El Salvador as the next nation to adopt cryptocurrencies as legal tender, Bloomberg News reported. Zahidi Zainul Abidin, Malaysia’s deputy minister in the communications and multimedia ministry, made the proposal in parliament on March 21. “We hope the government can allow this. We are trying to see how we can legalise this so that we can develop youth participation in crypto and assist them,” Abidin said. He added that in case of a formal approval Malaysia’s finance ministry would be responsible for regulating crypto alongside institutions such as the...

If it goes after Malaysia’s communication ministry, the country should follow El Salvador as the next nation to adopt cryptocurrencies as legal tender, Bloomberg News reported.

Zahidi Zainul Abidin, Malaysia’s deputy minister in the communications and multimedia ministry, made the proposal in parliament on March 21.

“We hope the government can allow this. We are trying to see how we can legalise this so that we can develop youth participation in crypto and assist them,” Abidin said.

He added that in case of a formal approval Malaysia’s finance ministry would be responsible for regulating crypto alongside institutions such as the central bank and the securities commission, but did not elaborate how his ministry would be involved in crypto.

No formal stance yet by the central bank

So far, the Malaysian central bank has not laid out a formal stance on the issue, apart from plans to introduce a central bank digital currency. In September last year, the country joined forces with the Bank for International Settlements, Australia, Singapore and South Africa to test the use of central bank digital currencies for international settlements via a shared platform in a project dubbed Project Dunbar.

Malaysia’s finance minister Tengku Zafrul Aziz – who would have a decisive decision power in allowing crypto as legal payment in the country – is so far less bullish on the idea. Earlier in March, he said that crypto is “not a good store of value and a medium of exchange” because of its volatility.

So far, El Salvador is the only country globally to have adopted Bitcoin as legal tender – albeit with mixed success. A survey of companies by the Central American nation’s chamber of commerce published earlier this month found that just 14 per cent had transacted in Bitcoin since September last year, when El Salvador recognised the world’s leading cryptocurrency as legal tender.

Majority of global countries allow crypto use and trade

A number of countries and territories, including the European Union, Canada, the US, Mexico, most of Latin America, India, Pakistan, all of Southeast Asia, Japan, South Korea, Australia, New Zealand, South Africa, Nigeria, Tanzania, Angola, Namibia, most of Middle East and Western and Central Asian countries, as well as Russia and Ukraine, have legalised the use and trade of cryptocurrencies fully or with certain restrictions such as a banking ban but stopped short of adopting them as legal tender, instead only providing a regulatory framework for digital assets.

Crypto is currently explicitly forbidden in China, North Korea, Bangladesh, Nepal, Bolivia, Algeria, Morocco and Egypt.

UPDATE: On March 24, Malaysia’s deputy finance minister Mohd Shahar Abdullah said in parliament that the government has no intention to recognise cryptocurrencies as legal tender in the country.

“Cryptocurrencies like Bitcoin are not suitable for use as a payment instrument due to various limitations including price swings and exposure to cyber threats,” he said.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

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