Is Malaysia The Next El Salvador? Communications Ministry Proposes Adoption

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Malaysia’s Ministry of Communications and Multimedia is supporting the adoption of cryptocurrencies such as bitcoin as legal tender within the jurisdiction.

Malaysian Minister Recommends Making Crypto Legal Tender

Malaysia’s Comms Ministry is warming up to cryptocurrencies.

According to a March 21 report by Bloomberg, the deputy minister of the Malaysian Ministry of Communication, Zahidi Zainul Abidin, said they are looking to legalize crypto and non-fungible tokens (NFTs) so that young people can use them for their day-to-day transactions and get the assistance they need. These younger generations are currently the most active users of crypto.

Zahidi noted that crypto regulation currently lies in the hands of the country’s central bank and the Securities Commission of Malaysia. Nonetheless, the Ministry is ready to open a dialogue with them and urge legalization because the cryptocurrency sector is a “business and financial program of the future, especially for young people now.”

Bitcoin became legal tender in El Salvador last September, marking the world’s first. The Latin American nation also started mining the flagship cryptocurrency using geothermal energy. The firebrand Salvadoran president Nayib Bukele predicted that more countries will follow in his country’s footsteps this year and embrace bitcoin. 

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At the moment, Singapore is often viewed as Asia’s crypto hub due to the fact that regulators in the country have developed a comprehensive regulatory framework that accommodates the uniqueness of the nascent asset class.

Malaysia could be en route to becoming Asia’s next hub — and basically the next nation after El Salvador to open the doors to crypto — if it offers clarity on digital assets and recognizes them as legal tender.

However, the country’s Finance Ministry is still wary of bitcoin legalization. Earlier this month, finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said cryptocurrencies don’t meet the known qualities of money. As such, any transactions involving crypto assets are deemed illegal in Malaysia. The minister revealed that the nation’s central bank was actively exploring a central bank digital currency (CBDC).

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