Malaysia’s deputy finance minister says that cryptocurrencies, such as bitcoin and ethereum, are not suitable as a means of payment or a store of value. While digital assets are not recognized as legal tender in Malaysia, the finance ministry official said that they are an asset class that can be invested in.
Deputy Finance Minister on Cryptocurrency in Malaysia
Malaysian Deputy Finance Minister Yamani Hafez Musa talked about cryptocurrency Thursday in reply to a question raised by parliament member Nurul Izzah Anwar in Dewan Rakyat, The Star reported. The parliament member asked about the government’s role in monitoring and regulating cryptocurrency.
Noting that cryptocurrencies are not a payment instrument regulated by the central bank, Bank Negara Malaysia, the deputy finance minister said:
Digital assets such as bitcoin and ethereum are not suitable to be used as a payment instrument … 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 is exposed to volatility as a result of speculative investments,” he added. The deputy finance minister also explained that cryptocurrencies are not suitable as a means of payment because they “do not exhibit characteristics of money.”
He proceeded to discuss several issues he sees with cryptocurrency, including its volatility, risk of theft, cyberattacks, and its inability to process as many transactions as the current Visa payment system. Furthermore, he raised concerns regarding the environmental impact of cryptocurrency mining, stating:
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.
The energy usage of bitcoin has been a controversial topic, including the claim that bitcoin transactions use much more energy than Visa transactions.
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