Malaysia’s Central Bank Paper Names Bitcoin and XRP as Potential Alternatives to Bank Deposits

A new research paper from Bank Negara Malaysia (BNM) has identified Bitcoin (BTC) and Ripple’s XRP as possible alternatives to traditional bank deposits. The document marks a rare public acknowledgment of the role digital assets could play in Malaysia’s financial landscape.

The paper was prepared by the central bank’s research and monetary policy department. It explores how decentralized digital currencies could serve as a store of value or as payment instruments. While stressing their volatility and regulatory gaps, the authors note they can provide specific benefits under certain conditions.

Bitcoin was described as having “digital gold” characteristics due to its fixed supply and decentralized network. XRP was highlighted for its liquidity and speed, making it suitable for high-volume payment corridors. According to the paper, these traits could be useful in a changing financial environment where technology is reshaping how people save and transfer funds.

Cautious but Open

BNM clarified that the paper does not signal a change in policy or a move toward making crypto legal tender. The findings aim to inform future discussions on how new forms of money could fit into the financial system.

“The evolving nature of money requires us to continuously assess emerging forms of value storage and exchange,” the paper stated. “While bank deposits remain the dominant choice, alternative instruments, whether asset-backed, tokenized, or purely digital, should be evaluated for both benefits and risks.”

The report also calls for regulatory safeguards and public education. It warns that integration with the banking system should only happen after strong protections are in place.

Industry and Global Reaction

Analysts view the central bank’s mention of BTC and XRP as a significant step.

“This is not an outright endorsement, but it shows regulators are starting to see practical roles for certain digital assets,” said Tan Wei Jun, a Kuala Lumpur-based fintech consultant.

Globally, other central banks have explored similar topics. The Bank of England, the European Central Bank, and the Monetary Authority of Singapore have all studied how public cryptocurrencies could work alongside traditional banking products.

BNM has not announced any timeline for consultation or new rules. However, the paper signals a willingness to examine how BTC, XRP, and other assets could complement the deposit-based system in the future.