Malaysian Ministry Wants Crypto Legal to Promote Adoption Among Youth

Key Insights:

• A Malaysian Ministry has called the government to legalize crypto.
• Legalizing cryptos would support youngsters, says Deputy Minister for communications.
• The Malaysian central bank has not announced a formal stance on adopting Bitcoin as legal tender.

The Malaysian Ministry of Communications and Multimedia has called regulators to adopt cryptocurrencies as legal tender in the South-East Asian nation.

Malaysia To Recognize Crypto As Legal Tender?

Currently, Malaysia does not recognize cryptos as a legal tender; however, it is not illegal either. Only El Salvador has adopted Bitcoin as legal tender so far.

According to Deputy Minister for Communications Datuk Zahidi Zainul Abidin, the younger generation would benefit, given the government legalizes cryptos.

Speaking at a parliamentary session on Monday, the minister said that millennials are active crypto users. Calling the cryptos as “future of finance,” he told the ministry will look into ways to foster youth’s involvement in digital assets.

“We hope the government will allow and legalize this so that we can increase the youth’s uptake of cryptocurrencies.”

Answering a question from a lawmaker on the government’s stance on non-fungible token (NFT) marketplaces, Zahidi said that all these regulations are under the purview of Bank Negara Malaysia and the Securities Commission (SC) Malaysia.

However, Zahidi did not specify the ministry’s involvement in cryptocurrencies.

Malaysia’s Finance Minister said in March that crypto payments such as Ethereum were illegal in the country as they do not have the characteristics of fiat money. He added,

“In general, digital assets are not a good store of value and a medium of exchange. This is due to the fact that digital assets are vulnerable to volatile price fluctuations due to speculative investments, the risk of theft due to cyber threats, and lack of scalability,”

Malaysia’s CBDC Moves

Furthermore, Malaysia is accessing the potential benefits of adopting a central bank digital currency (CBDC).

Bank Negara Malaysia said in January that it is “actively assessing” a CBDC study. The central bank said that the study would boost both technical and policy capabilities.

However, the bank did not have immediate plans to introduce one soon. “We have focused our research on CBDC via proof-of-concept and experimentation to enhance our technical and policy capabilities,” the central bank said.

Aaron Tang, Country Manager for Luno crypto exchange Malaysia, told FXEmpire,

“We believe CBDCs bolster the need for truly decentralized, trustless, and permissionless cryptocurrencies like Bitcoin and Ethereum that offer cheaper, faster, secure, and more inclusive access to money.”