The Malaysian Finance Ministry has squashed the hope of adoption of cryptocurrencies as its legal tender with a statement from its Deputy Finance Minister.
“Cryptocurrencies like Bitcoin are not suitable for use as a payment instrument due to various limitations” said Mohd. Shahar Abdullah in Parliament on Thursday.
Citing price swings and exposure to cyber threats as parts of reason for the decision, the statement does not come as a surprise since the finance ministry has previously stated that cryptocurrency is not a “store of value and a good medium of exchange”.
The statement comes in direct contradiction with the suggestion made by the Malaysian Communication Ministry. The comms ministry proposed the adoption of crypto as a legal tender to increase participation of the youth.
Although nowhere under the jurisdiction of the comms ministry, Datuk Zahidi Zainul Abidin, the Deputy Communications and Multimedia Minister said “We hope the government can allow this.”
Cryptocurrency falls under the purview of the country’s central bank, Bank Negara Malaysia and Securities Commission.
The Malaysian government is not completely against the use of cryptocurrency. The Bank Negara Malaysia in partnership with the central bank’s Australia, Singapore and South Africa is a part of Project Dunbar.
The BIS Innovation Hub led project is developing prototypes for a platform that would allow international settlements using digital currencies issued by several central banks.
