Malaysia: Central Bank Studying Potential Benefits of a CBDC
The Malaysian central bank is the latest to assess the potential benefits of a central bank digital currency (CBDC), Bloomberg reports, January 17, 2022.
Malaysian Central Bank Exploring the Need for CBDC
In a recent development, Bank Negara Malaysia, the central bank of Malaysia stated that it “is actively assessing the value proposition of central bank digital currency (CBDC) to Malaysia.”
The central bank added:
“While a decision has not been made to issue CBDC, we have focused our research on CBDC via proof-of-concept and experimentation to enhance our technical and policy capabilities, should the need to issue CBDC arise in the future.”
It will be recalled that last year in September Malaysia allied with the Bank for International Settlements, Australia, Singapore, and South Africa to gauge the utility of CBDCs for international settlements through a shared platform in a project called Project Dunbar.
At the time, BIS declared:
“These multi-CBDC platforms will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks, eliminating the need for intermediaries, while also cutting the time and cost of transactions.”
Shortly following the joint announcement by the aforementioned central banks, the Reserve Bank of New Zealand stated it is also considering entering the CBDC space and exploring how digital currencies would benefit the island nation’s economy.
CBDC Race Continues to Get Congested
The arrival of the coronavirus pandemic likely fast-forwarded the declining use of cash across the globe coupled with the growing popularity of digital payments. Accordingly, central banks around the world are burning the midnight oil to conduct thorough research into the viability and benefits of CBDCs over physical cash.
As reported by BTCManager in August 2021, the Reserve Bank of India is considering launching a digital Rupee even though the regulations for cryptocurrencies in the country are still ambiguous at best.
In the same vein, the Bank of Thailand also revealed its plans to develop and trial its retail CBDC in the second quarter of 2022.
In recent news, BTCManager reported that the US Federal Reserve Chair Jerome Powell assured members of the US Congress that the highly anticipated report on digital currencies will be released very shortly.