Malaysia Goes Back And Forth With Crypto As Regulator Claims Country Has No Plans To Accept The Asset As Legal Tender

• Malaysia’s deputy finance minister has stated that the country will not be accepting cryptocurrencies as legal tender in the future.
• The Minister went on to list a host of limitations against cryptocurrencies including price fluctuations.
• At the start of last week, another minister suggested that the country was almost ready to accept BTC as legal tender.

Diverging accounts are emanating from Malaysia over plans for BTC adoption as an official currency. One Minister suggested that the country was about to take the leap while another bluntly stated the country had no remote plans of accepting the asset as legal tender.

The Divergence In Opinions

Deputy Finance Minister, Mohd Shahar Abdullah has rebutted the speculations that the Malaysian government was within inches of accepting Bitcoin as legal tender. According to the Minister, Bitcoin and other cryptocurrencies were inherently faulty and are grossly unsuitable as a medium of exchange.

“Cryptocurrencies like bitcoin are not suitable for use as a payment instrument due to various limitations,” said Abdullah in a speech to the country’s parliament. He added that they are “not a store of value and a good medium of exchange”.

Abdullah backed up his claims with the argument that cryptocurrencies are subject to insane levels of volatility that affect the value of holdings. His mistrust for the asset class also stems from the increasing rates of cryptocurrency hacks by bad actors. Since the start of the year, a growing number of projects have lost millions of dollars to cryptocurrency exploits with losses running into millions of dollars.

At the start of the week, Datuk Zahidi Zainul Abidin, the country’s Deputy Communications and Multimedia Minister was quoted by a local news outlet as suggesting that the country was about to legalize Bitcoin as legal tender. However, another news outlet stated that the Minister’s speech was merely about the legalization of non-fungible tokens in the country.

Malaysia To Be Cryptos Haven

Despite the country’s stance on cryptocurrencies, Malaysia has one of the highest adoption rates for the asset class. TripleA, a cryptocurrency payment provider estimates that at least 3% of Malaysians are holding a form of a digital asset which is around one million individuals.

Other research has equally suggested positive figures for the asset class. In terms of regulation, Malaysia is thought to be ahead of other countries with the country having a holistic framework for the registration of crypto exchanges, digital asset custodians, and ICOs. The combination of a young, tech-savvy population and the semblance of proper regulation puts Malaysia ahead of other countries in the region.

Binance has taken note of the country’s potential and made an equity investment in local market operator MX Global with a sizable market share in the country. Aside from the progressive nature of crypto, the country’s central bank is looking into the pros and cons of establishing a Central Bank Digital Currency.