KUALA LUMPUR: Bank Negara will continue monitoring the evolving digital asset landscape in 2025. While the central bank has no intention to recognise cryptoassets as legal tender, its focus remains on managing monetary and financial stability risks while preserving the integrity of the financial system.
“At the same time, Bank Negara aims to support responsible innovation through asset tokenisation in the financial sector. This will be alongside exploration work of domestic and cross-border CBDC as well as emerging technologies.
“Moving forward, collaboration with the private sector is expected to gather pace. This will inform the approach Malaysia will be taking to capitalise the benefits of tokenisation while managing related risks,” the central bank said in its annual report.
According to Bank Negara, the cryptoasset market in Malaysia is active but remains small compared to the overall financial market.
As of end-2024, cryptoassets account for less than 1% of total bank deposits and about 0.4% of Bursa Malaysia’s market capitalisation.
Despite this, trading activity has grown, with total volume rising to RM13.9bil in 2024 from RM5.4bil in 2023.
In 2024, there were 15 entities regulated by the Securities Commission (SC), covering Digital Asset Exchanges (DAX) custodians, initial exchange offering operators and cryptoasset funds (2019: three DAX players).
Banks in Malaysia primarily engage with cryptoassets by providing services to registered digital asset players, such as operating accounts and facilitating payments and withdrawals for customers.
While some banks are open to expanding their involvement, most remain cautious due to high volatility and fraud risks, limiting any impact on the broader financial system.
Beyond cryptoassets, the potential of distributed ledger technologies (DLT) is gaining recognition for improving financial system efficiency. Regulators and institutions are exploring asset tokenisation, which represents financial assets on blockchain networks.
The tokenised market (excluding cryptoassets) could reach US$2 trillion by 2030, with growing interest in fund management and settlement assets.
“Bank Negara sees the potential for asset tokenisation to drive innovative use cases, as outlined in the Financial Sector Blueprint (2022–2026). This will complement Bank Negara’s research and exploration on domestic and cross-border central bank digital currency (CBDC),” it said in the report.
Among others, Bank Negara sees the potential for tokenised deposits to serve as a credible on-chain settlement asset to complement wholesale CBDC.
Beyond tokenised money, Bank Negara is exploring the potential for broader tokenisation of real-world use cases for the financial sector. This exploration will involve collaboration with key stakeholders such as the SC and the private sector.
“This exploration will involve collaboration with key stakeholders such as the SC and the private sector. These use cases may include, but are not limited to, programmable payments, supply chain finance, and treasury and liquidity management.
“To facilitate this exploration, Bank Negara aims to issue a discussion paper on asset tokenisation in 2025,” the central bank said.
