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The Central Bank of Malaysia (BNM) is carefully monitoring the expansion of asset tokenization, acknowledging its capacity to enhance the effectiveness of the financial framework. Nevertheless, they are also maintaining vigilance regarding the hazards linked to cryptocurrencies.
In their annual report for 2024, BNM detailed strategies to bolster asset tokenization and investigate digital asset technologies. While they are receptive to these novelties, they do not plan to acknowledge cryptocurrencies as official currency.
Regardless, the cryptocurrency market in Malaysia has been fairly vibrant. The aggregate worth of cryptocurrency dealings in the nation surged to approximately $3.06 billion in 2024, a considerable escalation from the $1.19 billion documented in 2023 – an augmentation of roughly 157%.
However, the central bank remarked that while the cryptocurrency market is dynamic, it persists as diminutive in contrast to the overall magnitude of Malaysia’s financial markets. Crypto assets constitute less than 1% of the total savings in the banking structure and approximately 0.4% of the market capitalization of securities cataloged on Bursa Malaysia (the Malaysian stock exchange).
BNM perceives tokenized reserves as possessing the aptitude to evolve into a dependable on-chain settlement asset, supplementing wholesale central bank digital currencies.
Tokenized deposits, which are provided by supervised financial organizations, resemble conventional commercial bank deposits and signify a demand against the providing bank.”
Although Bank Negara Malaysia (the central bank) recognizes tokenization’s possibility to enhance the financial system’s effectiveness, it has unequivocally declared that cryptocurrencies will not be regarded as lawful money. The central bank, on the other hand, intends to carefully watch the cryptocurrency arena and predicts that this sector will continue to expand until 2025.
