Malaysian Deputy Finance Minister clarified on Thursday in the parliament that Malaysia has no plans of accepting Bitcoin as a legal tender in the country.
Mohd Shahar Abdullah, the Deputy Finance Minister, blamed the price volatility and Bitcoin’s susceptibility to cyber-attacks as the main reasons behind its unsuitability as a legal tender.
"Cryptocurrencies like Bitcoin are not suitable for use as a payment instrument due to various limitations,” the deputy minister further explained.
The deputy minister's remarks are in response to Malaysian Deputy Minister of Communications, Zahidi Zainul’s proposal to make Bitcoin legal tender in Malaysia, which was put forward in the Malaysian parliament last week.
Malaysia is already examining the idea of a central bank digital currency, or popularly known as CBDC. The Central Bank of Malaysia has joined a trial with the Bank for International Settlements to develop a proof of concept for their CBDC.
"The evolving technical and payment landscape has motivated Bank Negara Malaysia to conduct an in-depth examination of the prospects for central bank digital currencies, also known as central bank digital currency," Mohd Shahar added.
Central bank digital currencies are essentially electronic representations of national currencies. Unlike cryptocurrencies like Bitcoin, they can be regulated and are not decentralised.
Malaysia ranks 23rd on Chainalysis' 2021 Global Crypto Adoption Index. The general population of the country is already comfortable with transacting using cryptocurrencies like Bitcoin.
