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Malaysian Deputy Says Bitcoin Should Become Legal Tender

Deputy Minister of Communications and Multimedia Zahidi Zainul suggested on Monday that Malaysia should recognize Bitcoin and other crypto-assets as legal cash. He told Parliament, “We hope the government can allow this.”

The Ministry of Communications and Multimedia oversees well-known industries like broadcasting and internet infrastructure, as well as a slew of smaller issues like digital signatures. Malaysia‘s executive branch also has a Ministry of Science, Technology, and Innovation and a Ministry of Finance, both of which would have to weigh in on any government intentions to adopt cryptocurrencies.

Malaysia’s government hasn’t offered many hints that it’s adopting a crypto-first approach à la El Salvador. It is studying a central bank digital money, as do many other countries. It joined a trial with the Bank for International Settlements in September 2021, and the central bank revealed in January that it was working on a proof of concept “to enhance our technical and policy capabilities, should the need to issue [a] CBDC arise in the future.”

CBDCs and Bitcoin

While central bank digital currencies are simply electronic replicas of current national currencies—in this case, the ringgit—cryptocurrencies are decentralized and exist outside of government control. Central banks can’t handle Bitcoin in the same way they manage monetary policy — via interest rate increases or bond-buying.

Smaller countries are generally at the mercy of fluctuating pricing, whereas governments that become BTC whales can impact markets by purchasing or selling the asset. El Salvador declared Bitcoin official tender in September when the price of the cryptocurrency was hovering around $50,000.

According to CoinMarketCap, BTC has touched an all-time high above $68,000 and a low below $34,000 since then. To summarize, its use as a medium of exchange is still very new, and most Salvadoran firms have yet to conduct any BTC transactions, as the US dollar remains the primary transaction currency.

Malaysia, on the other hand, has a more diverse economy and a higher-earning populace than El Salvador. It also has more crypto users, according to Chainalysis’ 2021 Global Crypto Adoption Index, ranking 23rd for adoption versus 89th for El Salvador.

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