Bank Negara Malaysia (BNM) recently prepared a working paper to identify Bitcoin and XRP crypto tokens as alternatives to current monetary instruments and potential payment methods.
The study is to assess the fundamentals of cryptocurrencies and central bank digital currencies (CBDCs), which opens up a huge opportunity for digital assets to replace traditional currencies if their use becomes more widespread.
Based on the working paper, personal tokens such as Bitcoin or XRP could be widely used as a payment method outside the banking system in the future, replacing CICs and bank deposits.
However, the final report revealed that the potential of both cryptocurrencies is still weak, stating that the lack of a strong and stable peg, the risk of price drops continues to be the main factor preventing these alternatives from being able to replace existing payment systems.
In addition, transactions without involving central bank intermediaries also require large liquidity to process cryptocurrency payments.
This assumes that financial decentralization does not allow any payment asset to experience significant increases and decreases.
While the outlook for personal tokens remains unclear, the naming of XRP and BTC in the BNM working paper has reignited debate on social media about their utility.
XRP supporters see it as evidence that the digital asset is gaining recognition, while opponents continue to reject the view.
