Malaysia’s Deputy Finance Minister stated in parliament on Thursday that Malaysia has no intentions to accept Bitcoin as legal cash. Mohd Shahar Abdullah, the deputy finance minister, said Bitcoin’s price volatility and vulnerability to cyber-attacks made it unsuitable as a legal tender.
Malaysia is already investigating the idea of a CBDC, or central bank digital currency. Malaysia’s Central Bank has decided to take part in a trial with the Bank for International Settlements to prove the feasibility of the CBDC.
“The shifting technology and payment landscape have caused Bank Negara Malaysia to assess the potential for central bank digital currencies, also known as central bank digital money,” Mohd Shahar explained.
Digital currencies issued by central banks are simply electronic representations of sovereign currencies. They can be regulated and are not decentralized, unlike cryptocurrencies like Bitcoin.
On Chainalysis’ 2021 Global Crypto Adoption Index, Malaysia is ranked 23rd. The general public in the country is already familiar with using cryptocurrencies such as Bitcoin to conduct business.
The Ministry of Housing and Local Government, according to Zahidi, is in charge of “digital financial operations,” while the Finance Ministry and its agencies, such as the central bank and the securities regulator, are in charge of financial regulation.
The central bank has yet to make a decision on whether or not Bitcoin will become legal tender. In January, it told Bloomberg News that it was thinking about introducing a central bank digital currency, or CBDC. Requests for comment on Zahidi’s assertions were not immediately returned by Bank Negara Malaysia.