Deputy minister Zainul Abidin has proposed the legalisation of cryptocurrencies in Malaysia to ease financial dealings among the younger population
Earlier this, the deputy minister of finance in the country spoke strongly against crypto assets
In a move to indicate that the Malaysian Ministry of Communications and Multimedia (KKMM) is supporting the adoption of crypto assets, deputy minister Zainul Abidin has called for the legalisation of crypto.
Speaking during a parliamentary session today, Abidin explained that it is important for Malaysia to legalise some facets of crypto and NFTs as they could potentially be useful, especially for the younger generation. He noted that the crypto space has increasingly become popular with this demographic.
“We hope the government can try to legalise this matter so that we can expand the participation of young people in cryptocurrencies and help them in terms of energy consumption and so on,” Abidin said.
According to Bloomberg, the deputy minister wants more than just making the digital assets legal, as he’s reportedly pushing to make crypto a legal tender in the country.
The deputy minister, however, concedes that the regulatory powers over crypto fall under the financial watchdogs – the central bank and the Securities Commission of Malaysia.
It is not a straightforward path for crypto adoption
Creating a crypto-friendly mood in Malaysia would command quite a bit of effort, notwithstanding the ambition and desire to make cryptocurrencies officially recognised payment forms.
The Asian country has in the past struggled to curtail illegal crypto mining and related crimes such as electricity theft. Markedly, most offenders have been the younger people that Abidin aims to empower. Between 2018 and 2021, there was power theft amounting to $550 million.
Being the case, policies would be required to define sustainable interaction with this asset class while maintaining a competitive marketplace.
The Finance Ministry is against the idea of crypto
The Ministry of communication’s support for cryptocurrencies appeared to negate a declaration made earlier in the month by Malaysia’s deputy finance minister. Yamani Hafez questioned the idea of using crypto as a mode of payment.
Hafez also castigated cryptocurrencies over the risk of debt, volatility, and cyber violence.
“In general, digital assets are not a good store of value and a medium of exchange. This is due to the fact that digital assets are vulnerable to volatile price fluctuations due to speculative investments, the risk of theft due to cyber threats and lack of scalability,” he said.
Further, he explained that the existing payment systems such as Visa are far superior in processing payments at an even better efficiency.
“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.”