The Central Bank of Malaysia has acknowledged XRP, the digital asset developed by Ripple, as a potential alternative to traditional forms of money, including cash and bank deposits. This recognition, made in an official document, places XRP alongside Bitcoin in a discussion about the future of monetary instruments and payment systems. The mention of both assets is part of a broader exploration of digital currencies and their potential role in the evolving financial landscape [1].
According to the Bank Negara Malaysia document, XRP and Bitcoin are categorized among private digital assets that could serve as alternatives to current monetary and payment instruments. The document suggests that these tokens might be used for payments outside the banking system, particularly if they gain widespread adoption. It also notes that such digital assets could potentially replace cash or traditional bank deposits in the future [1].
The document includes an illustrative diagram titled “Illustration of Public and Private Monies,” which categorizes public money (such as central bank reserves and potential central bank digital currencies) alongside private money (including bank deposits and institutional deposits). It further links these categories to monetary aggregates such as M1, M2, and M3, and outlines the debtor-creditor relationships between the central bank, banks, non-banks, and other institutions. The document also references Project Mawar, a proof-of-concept initiative the bank is using to explore the potential use cases of central bank digital currencies [1].
XRP’s inclusion in this document is significant as it reflects growing institutional and regulatory interest in blockchain-based solutions. XRP’s existing use in real-time gross settlement by financial institutions globally could make it an attractive option for further adoption in Malaysia’s financial system. The mention of XRP, particularly alongside Bitcoin, indicates that the bank is considering a range of digital assets for their potential in modernizing the payment infrastructure [1].
However, the document also acknowledges the challenges associated with decentralized tokens. It notes that for these assets to function effectively as alternatives to traditional money, they must overcome significant barriers, including the need for large liquidity balances to enable efficient settlement across different cryptocurrencies. Additionally, the absence of centralized intermediaries introduces operational complexities that are not present in traditional systems managed by central banks or regulated institutions [1].
The acknowledgment of XRP by the Central Bank of Malaysia aligns with a broader global trend of central banks engaging with digital currencies. As financial institutions continue to explore the implications of blockchain technology and digital assets, such regulatory openness may encourage further innovation and experimentation. This development could also influence private sector actors to consider XRP as a viable tool for enhancing cross-border payments and financial services, particularly due to its established utility in real-time transactions [1].
Source:
[1] Times Tabloid – XRP Wins Central Bank of Malaysia’s Major Acknowledgement
