Malaysian Ministry Proposes Legal Tender of Crypto Currency

The Malaysian Ministry of Communications and Multimedia has formally proposed the legal tendering of cryptocurrencies like Bitcoin and Ethereum. The ministry has stated that the digital assets fall under the jurisdiction of the nation’s Securities Commission and Central bank. However, the decision on how the digital assets will be regulated will remain in the hands of the Malaysian regulators. In this piece, we’ll explore the reasons why the government is considering legalizing cryptocurrency and the potential advantages it could bring to the economy.

Although the government has not officially announced its position on crypto, it has said that it is evaluating the issue. In January, the ministry told Bloomberg News that it is assessing the introduction of central bank digital currencies. It did not immediately respond to our request for comment. This move comes a few months after the country’s central bank teamed up with South Africa, Australia, and Singapore to launch Project Dunbar, which is testing the use of CBDCs for international settlements.

The ministry is currently under the jurisdiction of the local central bank and the Securities Commission of Malaysia. It is the second country in the world to legalize cryptocurrencies. El Salvador legalized them last year, and the president of El Salvador predicted that two more will do so this year. The ministry does not specify the exact role it will play in regulating digital assets. For example, the Financial Ministry is responsible for regulating financial transactions. The securities regulator, on the other hand, is part of the Finance Ministry. The country’s central bank has jurisdiction over digital financial activities.

As cryptocurrency adoption continues to rise in Malaysia, the government’s stance on cryptocurrencies has been tempered in recent months by allowing crypto exchanges to operate legally in the country. While the country has been skeptical of cryptocurrencies in general, it has recently embraced the concept of a “cashless” economy by recognizing them as a legitimate form of payment. This decision, however, is still subject to the parliament.

The move comes after the government rejected cryptocurrency as money in Malaysia. According to the Ministry, cryptocurrencies are not backed by any assets, and their features are not universally equivalent to those of a standard currency. Additionally, the lack of central issuers render them unsuitable as legal tender in the country. If the government does not want to legalize cryptocurrencies, it can’t legissify them as a means of payment.

Despite a lack of legal recognition in Malaysia, many cryptocurrencies are now being used as legal tender in other countries. While cryptocurrencies are not recognized as money in the country, they do show certain characteristics of a currency. The deputy minister of finance of Malaysia, for example, argued that a cryptocurrency does not have these characteristics. This is contrary to the Finance Ministry’s official position on cryptocurrency. The Comms ministry, meanwhile, said that recognizing crypto as legal tender is in the best interests of the nation.

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