A recent working paper from the Central Bank of Malaysia has identified XRP and Bitcoin as potential alternatives to traditional financial and payment systems.
Digital assets can replace bank deposits
A recent working paper from the Central Bank of Malaysia (CBM) has identified XRP along with Bitcoin (BTC) as “an alternative to current financial and payment instruments.” This paper examines what CBM calls modern money and the fundamentals of application to central bank digital currency (CBDC), posits that currency of circulation (CIC) or bank deposits can be replaced when these digital assets are ultimately widely used.
“Private tokens such as Bitcoin and XRP could be widely used as payment instruments outside of the banking system, replacing CIC or bank deposits,” the Working Paper argues.
Nevertheless, the paper ultimately downplays the outlook for two cryptocurrencies, citing the lack of a “stable nominal anchor” and a “trend of fragmentation” as factors that complement or exchange current payment systems.
Furthermore, the paper argues that without centralized institutions and intermediaries, “crypto platforms require large liquid balances to make payments across different cryptocurrencies.” This is because the paper argues that because decentralization is decentralized, “it does not allow parties to expand and contract.”
Despite this dimly lit conclusion about the prospect of a “private token” the identification of XRP alongside BTC in the CBM working paper has rekindled social media debate over the usefulness of the former. As expected, XRP supporters praised this as evidence that digital assets have acquired status, but this was rejected by the enemy.
On social media platform X, one user, Casey Delaney, has highlighted the importance of Central Banks' perception of XRP, calling it the “future of finances.” Meanwhile, one user by Philipp Sandner, whose BTC and Ethereum (ETH) qualifications were rejected by Alexander Bechtel, Agata Ferreira, Jonas Gross and Philipp Sandner as a means of payment, did not work with the two cryptocurrency supporters.
However, one user speculated that the conclusions of Malaysian central bank papers are not based on independent research, but rather on perspectives influenced by the World Bank and the International Monetary Fund.
“I think that with direct cooperation with the Malaysian government, this is most likely to reflect the impact of the IMF/World Bank, incompetence, corruption, or a mixture of all these. It is unlikely to be the result of an assessment of the depth of L2 scalability of BTC and its inherent strengths,” the user argued.
