Public advised to be cautious with the digital currency which is not legal tender in Malaysia, the bank cautions

This article is more than 6 years old

This article is more than 6 years old

The Malaysian central bank has become the latest to warn against the use of bitcoin in a statement released on Friday.

"The Bitcoin is not recognised as legal tender in Malaysia," the statement reads. "The Central Bank does not regulate the operations of Bitcoin. The public is therefore advised to be cautious of the risks associated with the usage of such digital currency."

The warning mimics that of the Chinese central bank, which told financial institutions in December that the digital currency doesn't have "real meaning" and lacks legal protections. The Chinese warning was followed up by a ban on third-party payment processors handling payments for bitcoin exchanges, a move which in effect ended legal purchases of bitcoin in the country.

Colbert Lau, the founder of Bitcoin Malaysia, which promotes the currency domestically, said that he was not concerned by the bank's statement.

"It's similar to the stance taken by the Monetary Authority of Singapore (MAS) [Singapore's central bank] earlier. While The Bank of Thailand had an outright ban, our Bank Negara Malaysia (BNM) did not outlaw its use or say bitcoin was illegal.

"We foresee big players from USA and Europe moving rapidly to Asia in the next few months and setting up local branches."

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