Malaysia rejects to accept crypto as legal tender

• Malaysia formally rejected the notion that cryptocurrencies may have money-like properties on Thursday.

• The Malaysian central bank, Bank Negara, is likewise not convinced, according to the Minister, as it has not approved the use of digital assets for payments.

Malaysian Deputy Finance Minister II Yamani Hafez Musa told Malaysian Member of Parliament Nurul Izzah Anwar (PH – Permatang Pauh) in the Dewan Rakyat on the role of the government in currency control and regulation that cryptocurrencies are not an acceptable payment option for the country.

The Malaysian central bank is not convinced

The Malaysian central bank, Bank Negara, is likewise not convinced, according to the Minister, as it has not approved the use of digital assets for payments.

Given Bank Negara’s engagement in the Dumbar Project, an experiment involving cross-border money transactions using blockchain technology, when asked if the Malaysian government has any plans to create a digital currency.

Bank Negara announced in January that it was putting a Central Bank Digital Currency (CBDC) to the test and researching the benefits of producing and using a cryptocurrency.

“While no decision has been taken to issue CBDC,” a bank spokesman explained, “we have concentrated our study on CBDC through a proof of concept and experimentation to strengthen our technical and political skills, should the necessity arise to issue CBDCs in the future.”

ALSO READ – Ukraine accepts crypto donations in more than 70 assets

India against the use of cryptocurrency 

Malaysia isn’t the only country that has made it illegal for cryptocurrencies to be used as legal money. India’s Finance Secretary, TV Somanathan, declared last month that digital assets would not be accepted as legal money in New Delhi.

The Indian Parliamentary Commission, on the other hand, has been debating how such an asset would be controlled if it were to be implemented. Only El Salvador has made Bitcoin legal cash after enacting legislation elevating the digital currency to national status.

“Cryptocurrency will never be recognized as a valid payment method.” Because it is legal tender, it can be used to pay off debts. “India will not issue any crypto assets as legal tender,” Somanathan added. “The Reserve Bank’s ‘Digital Rupee’ would be the country’s only legal tender.”

Why is Malaysia not accepting crypto?

However, Malaysia’s Deputy Finance Minister said that cryptocurrencies are a very volatile asset class, with Bitcoin reaching a high of $65,000 (RM272,382.50) in April 2021 before plummeting 50% due to market pressures the following week.

Cryptocurrency exchanges are also vulnerable to cyber-attacks. Between 2011 and 2021, over $12 billion (RM50.29 billion) was taken through hacking and cyberattacks, according to him.

Another crucial factor to consider is the significant environmental impact, as the energy necessary to conduct a bitcoin transaction could be used to process 1.2 million visa transactions.” He compared Bitcoin’s network usage to Argentina’s overall electricity use, saying, “Bitcoin’s network consumed 132 terawatt-hours in 2020.”

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

Latest posts by Steve Anderrson (see all)