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Central Bank of Malaysia, also known as Bank Negara Malaysia (BNM), recently replied to a query from Bloomberg about testing a Central Bank Digital Currency (CBDC). BNM is studying the usefulness of creating and employing a cryptocurrency for the nation.
The future of crypto is inevitable
BNM told Bloomberg in an email that “[BNM] is actively assessing the value proposition of central bank digital currency (CBDC) to Malaysia.” They added, “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.”
In December 2021, Yamani Hafez Musa, Deputy Finance Minister of BNM said, “The financial system in Malaysia continues to support the functioning of the economy while meeting the needs of individuals and businesses.”
He said during a Q&A session at the Dewan Rakyat — the lower house of the parliament — on Dec 15, 2021, “However, BNM will continue to actively assess the potential of CBDC to achieve public policy objectives.”
BNM still doesn’t trust cryptocurrency
BNM has declared its mistrust in cryptocurrencies such as Bitcoin and Ethereum many times before. According to BNM, it is assessing the use-cases of a CBDC because cryptocurrencies do not have the universal characteristics of money, consequently, they cannot be used as legal tender.
The Central Bank of Malaysia joined Project Dunbar to test the potential of CBDCs with the Bank for International Settlements, Australia, Monetary Authority of Singapore and South African Reserve Bank for international payments.
Moreover, creating a multi-CBDC platform could bring together central banks and commercial banks from around the world, allowing them to immensely improve cross-border payments and reduce the hustles.
Although things are still not clear, cryptocurrency regulation remains the trending topic of Malaysia. Blockchain technology and cryptocurrencies are here to stay, and many prefer decentralization to having a third-party authority controlling their finances or even lives.