Malaysia Central Bank Paper Sparks Debate by Naming XRP and BTC as Monetary Alternatives

A recent working paper from the Central Bank of Malaysia has identified XRP and bitcoin as potential alternatives to traditional monetary and payment systems.

Digital Assets Could Replace Bank Deposits

A recent working paper from the Central Bank of Malaysia (CBM) has identified XRP alongside bitcoin ( BTC) as potential “alternatives to the current monetary and payment instruments.” The paper, which examines the fundamentals of what the CBM calls modern money and its application to a central bank digital currency (CBDC), posits that these digital assets could eventually replace currency in circulation (CIC) or bank deposits if they become widely used.

“Private tokens such as Bitcoin or XRP may be widely used as means of payment outside the banking system in the future, replacing CIC or bank deposits,” the working paper asserts.

Nevertheless, the paper ultimately downplays the two cryptocurrencies’ prospects, citing their lack of a “stable nominal anchor” and “tendency towards fragmentation” as factors that work against them complementing or even replacing the current payment system.