Malaysia Looks Into Developing A Central Bank Digital Currency (CBDC)
Malaysia is the latest country to join the 87 nations exploring the opportunity to launch a central bank digital currency (CBDC).
The nation’s central bank, Bank Negara Malaysia has joined the global race to develop a digital version of its national currency. For the time being, the project is still in a research mode as the county is only “assessing the value proposition” of a CBDC.
Launching or researching a central bank digital currency has been on many countries’ to do list recently. While China is globally leading the efforts are by far, other nations such as Mexico, Indonesia, and Nigeria have also started exploring the initiative.
According to Bloomberg, Malaysia is the latest to join the party. While not making any final decisions, the Asian country has started researching how a central bank digital currency could affect its monetary network and whether it will be beneficial for its economy:
“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.”
A few months ago, Bank Negara Malaysia joined a group of central banks in Australia, Singapore, and South Africa to test a cross-border payments using multiple CBDCs. The goal was to estimate whether all parties could reduce the costs of such transactions and make them more accessible.
The joint effort, dubbed Project Dunbar, was setup to develop prototype shared platforms to enable direct CBDC transactions without the need for intermediaries.
CBDCs and related issues
Central bank digital currencies are digital tokens issued and fully controlled by superior institutions such as governments and central banks. As such, their use-cases caused many debates, and numerous individuals claimed they could harm the monetary system and reduce people’s freedom.
Edward Snowden, the infamous US whistleblower, is heavily against the CBDCs. Last year, he called them as a “perversion of cryptocurrency” and a “cryptofascist currency,” as they could grant a lot of power to the governments and leave less independence to society.
Snowden gave China as an example. He said that the total ban on everything crypto there, alongside the release of the digital-yuan, is intended to “increase the ability of the State to impose itself in the middle of every last transaction.”
He also talked about CBDC in the USA, saying that it would not be the digital equivalent of the dollar:
“After all, most dollars are already digital, existing not as something folded in your wallet, but as an entry in a bank’s database, faithfully requested and rendered beneath the glass of your phone.”
