Malaysia has become the latest country to investigate the possibility of launching a central bank digital currency. Malaysia’s central bank, Bank Negara Malaysia, has reportedly joined the global race to create a digital currency.
Malaysia enters the CBDC:
The idea of launching a central bank digital currency has been discussed in numerous countries lately. While China is the nation with the most advanced efforts, other nations like Mexico, Indonesia, and Nigeria explore the idea.
Malaysia was cited as the “newest state to dip its toes in a recent Bloomberg story.” While the Asian nation has not made any final decisions, it has started researching how a central bank digital currency might affect its monetary network and whether it would benefit its economy:
“While we have not made a decision regarding CBDC, we have been conducting research and experimentation on CBDC to improve our technical and policy capacities, in the event that the need to issue CBDC should arise”.
Just a few months ago, Bank Negara Malaysia worked with the central banks of Australia, Singapore, and South Africa to conduct a cross-border payments trial using multiple CBDCs.
Financial institutions aimed to determine whether all parties would reduce the cost of such transactions and make them more accessible. Dunbar, the project, aimed to develop prototype shared platforms that would enable CBDC transactions to be conducted directly without intermediaries.
Read More : CBDC: How It Functions & Is It Different From Bitcoin?
CBDCs and the Controversy:
Governments and central banks issue central bank digital currencies, which they fully control. Therefore, their use-cases led to numerous debates, and a number of people expressed concern that they would harm the financial system and restrict people’s freedom.
Edward Snowden is another influential critic of CBDCs. Last year, he called them a “perversion of cryptocurrency” and a “cryptofascist currency,” as they could give governments a lot of power and limit the independence of individuals.
He labeled them a “perversion of cryptocurrency” and a “cryptofascist currency,” as they could grant a lot of government power and allow society to lose its independence. Edward Snowden is another person strongly opposed to CBDCs.
Snowden cited China as proof of his claim. According to him, the announcement of the digital yuan, in combination with the total ban of all crypto, is to “increase the ability of the State to impose itself on every last transaction.”
Furthermore, he stated that the creation of a CBDC in the United States would not serve as a digital equivalent of the dollar: “The majority of dollars exist in a digital form, not as something folded in your wallet but as an entry in a bank’s database, faithfully requested and rendered on your phone.”
