Malaysian deputy finance minister responds to proposal to legalize Bitcoin

Published at: March 24, 2022

An official at the Ministry of Finance of Malaysia reportedly opposed the idea of adopting cryptocurrencies like Bitcoin (BTC) as a payment method following recent crypto-friendly proposals by the deputy communications minister.

Malaysia has no plans to recognize BTC as legal tender, deputy finance minister Mohd Shahar Abdullah said in a parliamentary meeting on Thursday, according to a Bloomberg report.

“Cryptocurrencies like Bitcoin are not suitable for use as a payment instrument due to various limitations,” Mohd Shahar declared, citing risks like volatility and potential cyber threats.

Instead of adopting cryptocurrency for payments, Malaysia will continue to focus on the potential development of the central bank digital currency (CBDC), the official added, stating:

“The growing technology and payment landscape have prompted Bank Negara Malaysia to actively assess the potential of CBDC.”

The Ministry of Finance of Malaysia did not immediately respond to Cointelegraph’s request to comment. This article will be updated pending new information.

Mohd Shahar’s remarks came shortly after Malaysia’s deputy communications and multimedia minister Datuk Zahidi Zainul Abidin called on local regulators and lawmakers to legalize certain use cases of cryptocurrencies and nonfungible tokens (NFT) on Monday. The official stressed that such measures would significantly support young people, crypto and NFTs have been growing massively popular among the younger generation.

Some sources also suggested that Zahidi proposed not just legalizing certain cryptocurrency transactions in Malaysia but rather adopting cryptocurrency as legal tender.

Related: Thailand SEC bans crypto payments, seeks disclosure of system failure from exchanges

Despite not being willing to adopt cryptocurrency as a means of payment, Malaysian regulators have apparently not restricted trading of cryptocurrencies so far, following in steps of many other countries like Indonesia. In recent years, local authorities like the Securities Commission of Malaysia were issuing approvals to cryptocurrency exchanges, while some of the world’s biggest crypto trading companies were also expanding to the country.

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