A Malaysian minister says Bitcoin and Ethereum do not have the characteristics of money.
Malaysia’s Deputy Minister, Yamani Hafez, noted that digital assets such as Bitcoin (BTC) and Ethereum (ETH) are not suitable when evaluated as payment instruments.
In a detailed response to a parliamentary question about cryptocurrencies and their growing use as money, the minister said:
“Digital assets such as Bitcoin and Ethereum are not suitable to be used as a payment instrument because these assets do not display the characteristics of money.”
Cryptocurrency volatility
While citizens are free to own and trade digital assets in Malaysia—a country considered relatively crypto-friendly—authorities have not permitted their use as legal tender. The minister reiterated this position and explained why Bitcoin and other cryptocurrencies are treated as digital assets rather than accepted as digital currency for payments.
“In general, digital assets are not a store of value nor a good medium of exchange. This is due to the volatile nature of digital assets, which are exposed to price swings as a result of speculative investment,” Hafez explained.
The minister’s reply followed a parliamentary question about the government’s outlook on crypto regulation and plans for a central bank digital currency (CBDC).
Bank Negara has not clarified a CBDC plan
He added that Bitcoin’s roughly 10 transactions per second pale in comparison to the more than 65,000 transactions per second that Visa can handle. From the official’s perspective, this performance gap supports the continued dominance of traditional payment systems.
The minister went on to say that Malaysia’s central bank, Bank Negara, has so far not authorized the use of digital assets for payments and has not finalized plans to issue a CBDC.
“Existing monetary policy tools and the current financial framework remain effective in maintaining the country’s monetary and financial stability,” he noted.
However, Hafez did not dismiss cryptocurrencies entirely. He said they are now regarded as an investment class open to exploration by the public. In that context, he noted that the Securities Commission (SC) of Malaysia treats certain crypto offerings as securities.
Earlier this week, Bitcoin and other cryptocurrencies drew global attention following Russia’s invasion of Ukraine. Within hours of the conflict’s outbreak, crypto holders donated hundreds of thousands of dollars in digital assets to a non-governmental organization (NGO).
Donations exceeded $4 million by the second day and reached $10 million within three days. In addition to BTC and ETH, Polkadot (DOT) was also accepted by the Ukrainian government.