Malaysia could adopt cryptocurrencies as fiat currency

Malaysia could adopt cryptocurrencies as legal tender - shutterstock 1420352729During an appearance in Congress on Monday, the Deputy Minister of the Ministry of Communications and Multimedia, Zahidi Zainul Abidin, said that Malaysia should adopt Bitcoin (BTC) and other cryptocurrencies as fiat currency.

"We hope the government can allow it," Abidin said in response to a question from an opposition lawmaker.

While the use of BTC globally as a store of value and payment instrument has grown, the same has not happened with the adoption of cryptocurrencies as fiat currency. So far only El Salvador has pledged to do so, drawing strong criticism from the International Monetary Fund (IMF) for the associated risks.

The Central Bank is studying the launch of the virtual Malaysian Ringgit

The feasibility of Salvadoran President Nayib Bukele's project remains under discussion. Since its adoption in September, when Bitcoin was declared fiat money, only 14% of businessmen have allowed transactions in BTC, according to a business survey made by the "Chamber of Commerce" of El Salvador.

According to the recently published study, Salvadoran businesses have not been attracted to the use of cryptocurrency.

During his speech, Minister Zahidi did not specify the extent of his ministry's involvement with regards to digital assets. The Malaysian Ministry of Communications and Multimedia is responsible for overseeing the printing and digital broadcasting sectors.

It also coordinates and oversees telecommunications companies, as well as the operations of 5G mobile networks in the country, and also the management of domestic and foreign investments in its technology industry.

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 linked, "digital financial assets" are also part of the powers of the "Ministry of Housing. and the local government ".

On the subject of adopting Bitcoin as fiat currency, the Malaysian issuer has not yet released a formal position. In January, the institution told Bloomberg News that it was considering issuing a central bank digital currency (CBDC), or virtual Malaysian Ringgit.

Bank Negara Malaysia did not comment on the remarks made by the Deputy Minister of Communications and Multimedia.

Why should you care

The IMF has promoted the adoption of blockchain technology, but through fiduciary digital currency projects that will compete with BTC and other cryptocurrencies. Other than Malaysia, other countries have looked into the potential of adopting BTC as fiat currency, but none have taken the bold step yet. If you want to know more, stay tuned to our channels. By the way, how would you view a cryptocurrency as legal currency in Italy? Let us know in the comments section below.