‘Cryptocurrencies not recognised as legal tender’

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Reports by MARTIN CARVALHO, FATIMAH ZAINAL and ASHLEY TANG

CRYPTOCURRENCIES are nonetheless not recognised as legal tender in Malaysia as they do not exhibit traits of common cash, says Deputy Finance Minister II Yamani Hafez Musa.

He mentioned cryptocurrencies, additionally identified as digital property, can be not a fee instrument that’s regulated by Bank Negara.

“Digital assets such as bitcoin and ethereum are not suitable to be used as a payment instrument as these assets do not exhibit characteristics of money.

“In general, digital assets are not a store of value and a good medium of exchange. This is due to the state of digital assets which are exposed to volatility as a result of speculative investments,” he mentioned when replying to a query raised by Nurul Izzah Anwar (PH-Permatang Pauh) in Dewan Rakyat yesterday.

Nurul Izzah had requested in regards to the authorities’s function in monitoring and regulating foreign money as effectively as cryptocurrency property.

She additionally requested if the federal government had any plans to create digital foreign money making an allowance for Bank Negara’s involvement in Project Dunbar for worldwide cash transfers utilizing blockchain know-how.

In explaining the volatility of cryptocurrency, Yamani mentioned bitcoin hit a peak of US$65,000 in April 2021 however shortly noticed a decline of fifty% the next week.

He additionally mentioned cryptocurrency is uncovered to the chance of theft during which statistics from 2011 to 2021 confirmed that digital property value US$12bil have been stolen by way of cyberattacks and hacking.

He added that bitcoin can be solely in a position to course of 10 transactions per second in comparison with 65,000 transactions per second on present fee methods such as Visa.

“Also, what is important is the huge impact on the environment because the electrical power that is used to process one bitcoin transaction can process 1.2 million Visa transactions.

“In 2020, the bitcoin network used 132 terawatt per hour which is equivalent to the entire electricity consumption of Argentina,” he mentioned.

Yamani added that at present Bank Negara additionally has not determined to difficulty a central financial institution digital foreign money as the nation’s home fee methods together with the Real-time Retail Payments Platform continues to function safely and effectively to assist the nation’s financial wants and allowed real-time digital funds.

“Additionally, the monetary policy tools and existing finances also remain effective in maintaining monetary stability and the country’s finances,” he mentioned.

Although digital property are not recognised as legal tender, Yamani added it nonetheless has many various usages together with as a category asset that may be invested in.

As such, he mentioned the Securities Commission as the market regulator has set digital property as a safety underneath the legislation and is accountable to manage its buying and selling actions.



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