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. Although digital assets in Malaysia aren’t recognized as legal tender, a finance ministry official stated that they can be used to invest in them.
Malaysian Deputy Finance Minister: Cryptocurrency
According to The Star, Yamani Hafez Moza (Malaysian Deputy Finance Minister) spoke about cryptocurrency on Thursday. He was responding to a question from Nurul Izzah anwar in Dewan Rakyat. The parliament member asked about the government’s role in monitoring and regulating cryptocurrency.
Bank Negara Malaysia’s deputy finance minister noted that cryptocurrency are not an instrument of payment that is regulated by the central banks.
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.”
The discussion centered on the volatility of cryptocurrency and cyberattacks. He also discussed how it is not able to process as many transactions per transaction as Visa. He also expressed concern about the impact cryptocurrency mining has on the environment, saying:
It is crucial to note the enormous impact of bitcoin on the environment. For example, one Bitcoin transaction can power over 1.2,000,000 Visa transactions.
Bitcoin’s energy consumption has long been controversial. One claim is that it uses more energy than Visa transactions.
Castle Island Ventures’ Nic Carter explained that the comparison between the energy use in bitcoin transactions and that of Visa transactions “relies on so many misunderstandings of Bitcoin.” He detailed: “In short, the comparison between Visa and Bitcoin is wildly off base. It’s an apples-to-koalas comparison. Visa, a payment network, relies on the underlying financial infrastructure. Bitcoin is the financial network. It is a full stack monetary network.”
Galaxy Digital released a May 2012 report that showed the bank system consumes significantly more energy than Bitcoin.
The official from the Finance Ministry said digital assets were not legal tender in Malaysia but that they have other uses and can be used to invest in. He noted that the country’s Securities Commission has defined crypto assets as securities under its law and the regulator is currently overseeing crypto trading activities in the country.
In addition, the deputy finance minister affirmed that “The monetary policy tools and existing finances also remain effective in maintaining monetary stability and the country’s finances.”
Malaysia is cracking down against illegal cryptocurrency mining. The Malaysian police closed down a cryptocurrency mining operation in December and confiscated 1,720 bitcoin mining equipment as part of an investigation into electricity theft. Last July, over 1000 bitcoin mining machines were destroyed by the authorities using a steamroller.
What do you think about the comments by Malaysia’s deputy finance minister about cryptocurrency? Please comment below.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com doesn’t offer investment, tax or legal advice. The author and the company are not responsible for any loss or damage caused or alleged caused by the content or use of any goods, services, or information mentioned in the article.