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Bitcoin would not be legal tender in Malaysia

Following allegations that a high-ranking government official had advocated making cryptocurrencies legal tender in Malaysia, the government reaffirmed in parliament on Thursday that it has no intention of doing so, according to Bloomberg.

In parliament, Deputy Finance Minister Mohd Shahar Abdullah said, “Due to various constraints, cryptocurrencies such as bitcoin are not suited for use as a payment mechanism”. Price volatility and sensitivity to cyber attacks are two instances of cryptocurrencies’ limits, according to him. His statement against bitcoin is similar to one he made earlier this month. “Digital assets, such as bitcoin and ethereum, are not fit for use as a payment instrument,” the deputy minister stated, adding, “In general, digital assets are not a good store of value or medium of exchange.”

On Thursday, the deputy finance minister told parliament, “Because of the changing technological and payment landscape, Bank Negara Malaysia is evaluating the possibilities of the central bank’s digital currency”. Datuk Zahidi Zainul Abidin, Malaysia’s Deputy Communications and Multimedia Minister, reportedly advocated making cryptocurrencies legal tender earlier this week. However, stories of what he actually stated are contradictory. The minister only advocated allowing non-fungible tokens (NFTs) to increase involvement in the crypto sector, according to Malaysia’s state news agency Bernama.

Bloomberg reported in January that Bank Negara Malaysia was weighing the pros and cons of introducing a digital currency. In an initiative named Project Dunbar, the government teamed up with the Bank for International Settlements, Australia, Singapore, and South Africa in September last year to explore the usage of central bank digital currencies for international settlements via a shared platform.