CRYPTOCURRENCY is not recognised as a valid currency in Malaysia, said Deputy Finance Minister II Yamani Hafez Musa.

He said digital assets such as Bitcoin or Ethereum are not practicable to be used as modes of payment as they do not show universal currency characteristics.

“In general, digital assets are not a good medium of exchange. This is because they are exposed to price fluctuations because of speculative investments,” he told the Dewan Rakyat today.

He was responding to Nurul Izzah Anwar (Permatang Pauh-PH), who asked about the government’s roles in monitoring and supervising currencies and cryptocurrencies.

Nurul Izzah also wanted to know whether the government has any plan to create a digital currency, taking into account Bank Negara Malaysia’s involvement in the Dunbar Project for international money transfers using blockchain technology.

The Sipitang MP said digital assets are not a safe tool with which to trade.

“For example, in April 2021, the price of Bitcoin went up to US$65,000 (RM272,382), the week after, it depleted by 50%.

“There are also thefts. From 2011 to 2021, digital assets worth US$12 billion were stolen by hackers in cyberattacks.”

Although other countries are mulling the feasibility of a central bank digital currency, BNM has yet to decide to adopt it, he added.

“In Malaysia, the domestic payment system and retail payment platform is still operating safely and well.”

Nurul Izzah then asked why the Securities Commission (SC) allows the trading of assets via digital assets exchange.

“With digital assets, we are also looking towards a cashless society. What are the steps taken by the ministry so vulnerable groups are not sidelined from this transition?”

Yamani replied that though digital assets are not a valid currency and practicable to be used as payment, they have other uses such as for investments.

He said BNM and the SC have set guidelines on digital assets.

As for vulnerable groups, BNM has stated that crypto is not legal currency, he added. – March 3, 2022.