Malaysian Ministry Proposes NFT Legalization for Boosting Crypto

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The adoption of crypto in Malaysia has been backed by the Ministry of Communications and Multimedia (KKMM), while the deputy minister is also calling on the country’s government for legalizing cryptocurrencies. According to reports on Monday, Datuk Zahidi Zainul Abidin, the deputy communications and multimedia minister, urged the regulatory authorities in Malaysia to give legal status to some use cases of non-fungible tokens (NFTs) and cryptocurrencies. He highlighted that these measures would be immensely helpful for young people in the country because the crypto space has shot up in popularity in the younger generation.

He went on to say that the KKMM was also working on ways that could help in encouraging young people to participate in the crypto industry. The deputy minister went on to say that the financial regulators in Malaysia would make the decision about crypto regulation, which includes the Securities Commission Malaysia and the central bank. However, he added that the KKMM was ready to bring up the issue regarding the crypto industry because it is the financial and business program of the future, especially where young people are concerned. He added that they were hoping the government would legalize cryptocurrencies because this would help them in increasing the participation of younger people and would also assist them in energy consumption and other areas.

Some sources said that Zahidi had not just proposed the idea of legalizing some cryptocurrency transactions in Malaysia, but had gone as far as suggesting that crypto be adopted as legal tender in the country. However, officials of the KKMM did not say anything about the matter. In fact, there are also some reports indicating that another country that intends to introduce bitcoin (BTC) as legal tender is Honduras. This would be after El Salvador had already done the same last year in September. Reports indicated that Xiomara Castro, the Honduran president, had said that they could not allow El Salvador to become the only country to escape dollar hegemony.

Tengu Datuk Seri Zafrul Tengku Abdul Aziz, the finance minister of Malaysia, had stated in early March that cryptocurrencies like Bitcoin and Ether could be not used for payments in the country because they are illegal. He added that this was because these cryptocurrencies did not satisfy the characteristics associated with money. He had asserted that digital assets were generally not a good medium of exchange or a store of value and this is because they are vulnerable to volatile fluctuations in price because of speculative investments, the lack of scalability and the possibility of theft because of cyber-attacks.

The minister also disclosed that the Bank Negara Malaysia, the central bank of the country, was also working on potentially developing a central bank digital currency (CBDC) like a number of other countries. He added that they were also working on developments related to blockchain because the trend appeared to be growing in the digital asset industry. Many other countries have chosen to focus on CBDC development, rather than legalizing cryptocurrencies because of the risks.

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