Malaysia's Communications and Multimedia Ministry proposes adopting cryptocurrencies as legal tender

Foreign media reported on March 21 that the Malaysian Ministry of Communications and Multimedia recommended that digital currencies such as cryptocurrencies be used as legal tender to help the younger generation who actively use cryptocurrencies on NFT trading platforms.

The Deputy Minister of Communications and Multimedia of Malaysia said that the ministry will study how to increase the participation of young people in digital currency because it is the future of finance. All of this is within the purview of Bank Negara Malaysia and the Securities Commission. We hope that the government will allow and legalize it so that we can increase the acceptance of cryptocurrencies among young people.

Data shows that Malaysia's crypto adoption rate ranks among the top. In October last year, the Finder Cryptocurrency Adoption Index surveyed more than 41,000 people in 22 countries. The survey showed that Nigeria has the highest cryptocurrency adoption rate in the world at 24.2%, followed by Malaysia and Australia. In these top three countries, investors mainly invest in Bitcoin, Ethereum and Cardano, and Dogecoin is also popular.

While the Malaysian Communications Ministry has suggested adopting cryptocurrencies as legal tender, this does not appear to be the case for the Ministry of Finance.

Earlier in March, Malaysia’s Deputy Finance Minister Yamani Hafez Musa said: “Digital assets such as Bitcoin and Ethereum are not suitable for use as a means of payment. Generally speaking, digital assets are not a store of value and a good medium of exchange. This is because the status of digital assets is subject to fluctuations due to speculative investments, and cryptocurrencies do not exhibit the characteristics of currency.”

Meanwhile, Yamani Hafez Musa raised concerns about the environmental impact of cryptocurrency mining. It is worth mentioning that Malaysia has been cracking down on illegal cryptocurrency mining activities. In December last year, Malaysian police shut down a crypto mining operation and seized 1,720 Bitcoin mining machines in an electricity theft operation. In July last year, authorities destroyed more than 1,000 Bitcoin mining machines with a steamroller.

Although digital assets are not recognized as legal tender in Malaysia, Yamani Hafez Musa said they are an asset class that can be invested in. He noted that the country’s Securities Commission has defined crypto assets as securities, and its laws and regulators are currently regulating crypto trading activities in the country.