Malaysia Refuses to Make Bitcoin Legal Tender
Mohd Shahar Abdullah revealed in a parliamentary meeting that Malaysia is not planning on recognizing Bitcoin as a legal tender, according to Bloomberg. The Deputy Finance Minister said that Bitcoin had limitations such as price volatility and “exposure to cyber threats” that made the crypto unsuitable as a payment method.
Shahar Abdullah’s statement seems to refute an earlier proposal made by Zahidi Zainul Abidin, Malaysia’s Deputy Minister of Communications and Multimedia. Less than a week ago, Zainul Abidin urged the government to adopt Bitcoin as legal tender. According to the official at the time:
“We hope the government can allow this. We are trying to see how we can legalize this so that we can develop youth participation in crypto and assist them.”
The latest development in Malaysia comes shortly after the Central Bank of Honduras (BCH) refuted earlier rumors about the country officially adopting Bitcoin.
In a statement published on March 23, the BCH said that Bitcoin is not regulated in Honduras, adding that the cryptocurrency does not have legal tender status in most countries. The central bank further said that it does not supervise crypto operations, and citizens who carry out cryptocurrency transactions will bear all associated risks and responsibilities.
Meanwhile, El Salvador, under the leadership of President Naybi Bukele, continues to forge ahead with its plans to foster wider Bitcoin adoption. El Salvador remains the first and only country to make Bitcoin legal tender.
However, El Salvador recently postponed the issuance of its $1 billion Bitcoin bond offering. The Bitcoin bond was scheduled to launch between March 15-20, 2022. The Russia-Ukraine war, as well as BTC’s price volatility, caused the government to change the date of the launch, which could be in September of this year.
Malaysia Considering CBDC
While Malaysia may not be open to adopting Bitcoin as legal tender, the government is studying a central bank digital currency (CBDC). According to Abdullah:
“The growing technology and payment landscape have prompted Bank Negara Malaysia to actively assess the potential of banks’ digital currency central or the central bank’s digital currency (CBDC).”
Back in September 2021, Bank Negara Negara Malaysia, along with other central banks in Australia, South Africa, and Singapore–in cooperation with the Bank for International Settlements–was involved in a pilot project called Project Dunbar. The project tested cross-border settlements with CBDCs.
Later in January 2022, Bloomberg reported that the Malaysian Central Bank said it is “actively accessing” the need for a sovereign digital currency, stating additionally:
“While a decision has not been made to issue CBDC, we have focused our research on CBDC via proof-of-concept and experimentation to enhance our technical and policy capabilities, should the need to issue CBDC arise in the future.”