BNM Explores XRP and Bitcoin as Payment Alternatives

Bank Negara Malaysia (BNM) has published a working paper examining private digital tokens, notably XRP and Bitcoin, as potential substitutes or supplements for traditional banking deposits and currency in circulation. The report highlights XRP’s near-instant settlement and low transaction costs as a competitive alternative for cross-border and everyday payments, while Bitcoin’s decentralisation and volatility may enable its role as a digital store of value. BNM emphasises challenges to adoption, including regulatory clarity, compliance with monetary policy, consumer protection, liquidity pool requirements, scalability without centralised intermediaries, and robust infrastructure for high transaction volumes. The paper also explores pilot programmes, interoperability with potential central bank digital currencies (CBDCs), and frameworks compliant with Islamic finance principles. Despite risks of disintermediation, price volatility, and infrastructure constraints, BNM’s analysis signals institutional optimism about private cryptocurrencies’ transformative potential in Malaysia’s payment landscape. Traders should monitor regulatory developments, XRP and Bitcoin adoption metrics, and liquidity initiatives for insights into market dynamics and trading opportunities.