Key Takeaways:
- Malaysia is not yet ready to accept cryptocurrencies as its legal tender, as can be made from the statement of its Deputy Minister.
- The Malaysian Government doesn’t want to disturb the stability of the economy of the country by introducing digital assets as payment methods.
There has been a lot of debate worldwide regarding the status of digital currencies. However, Deputy Finance Minister II Yamani Hafez Musa said that cryptocurrencies have not yet been recognised as legal tender in Malaysia because it does not possess the correct characteristics.
He said, “Digital assets such as Bitcoin and Ethereum are not suitable to be used as a payment instrument as these assets do not exhibit characteristics of money. In general, digital assets are not a store of value and a good medium of exchange.” To further explain, Yamani said that digital assets are volatile speculative investments. He referred to that time in April 2021, when Bitcoin plunged after hitting a high of US$65,000 within a fortnight.
Yamani also expressed his concerns regarding the scams related to Bitcoin and talked about the humongous amount of energy consumed by the digital currency.
To this, he said, “Also, what is important is the huge impact on the environment because the electrical power that is used to process one bitcoin transaction can process 1.2 million visa transactions. In 2020, the bitcoin network used 132 terra-watts per hour which is equivalent to the entire electricity consumption of Argentina.”
The Deputy Minister said that the country is unwilling to create its own CBDC (central bank digital currency) as it does not want to harm the stability of the country’s economy. His trust lies with the country’s conventional payment methods and the Real-Time Retail Payments Platform. He added, “Additionally, the monetary policy tools and existing finances also remain effective in maintaining monetary stability and the country’s finances.”
