XRP News Today: BNM Explores XRP as Potential Bank Deposit Alternative

A Bank Negara Malaysia (BNM) working paper has sparked significant interest for its exploration of XRP as a potential replacement for traditional bank deposits in the future. The document, titled Fundamentals of Modern Money and its Application to Central Bank Digital Currency (CBDC): An Exploratory Shariah Analysis (WP3/2025), outlines how private tokens could operate outside the conventional banking system and function similarly to deposits [1]. The paper specifically notes that "private tokens such as XRP may be widely used as means of payment outside the banking system in the future, replacing CIC or bank deposits," a statement that has gained traction on social media after being highlighted by commentator SMQKE [1].

The appeal of XRP, as outlined in the working paper, stems from the design of the XRP Ledger, which supports low-cost, high-throughput transactions and near-instant settlement. These features position XRP as a strong candidate for a tokenized payment system, particularly one that could, under appropriate conditions, serve as a complement or alternative to traditional deposit systems [1]. This is a key distinction in how BNM views XRP compared to other major cryptocurrencies.

In contrast, the working paper explicitly states that Bitcoin and Ethereum are considered unsuitable for use in payment systems. Despite their roles as store-of-value assets and their decentralized structures, their volatility, limited transaction capacity, and energy-intensive consensus mechanisms make them less practical for everyday payments [1]. This assessment reflects a strategic evaluation of which tokens are better suited for integration into future payment systems.

The BNM paper is described as exploratory rather than prescriptive, indicating that the central bank is currently assessing the potential use cases of private tokens without making any policy commitments. The document highlights the need to address regulatory and Shariah compliance requirements before any practical implementation can occur [1]. BNM’s cautious approach reflects a broader challenge faced by central banks globally—how to innovate while maintaining monetary stability and control.

Looking forward, the paper suggests possible pathways for collaboration, including pilot programs for tokenized payments, integration with BNM’s CBDC initiatives, and the development of Shariah-compliant regulatory frameworks. These steps, however, would require a series of comprehensive reforms, from legal adjustments to consumer protection measures, before private tokens like XRP could realistically replace or complement traditional banking functions [1].

Malaysia’s exploration of XRP as a potential replacement for bank deposits positions the country among a small group of central banks actively considering the role of private digital tokens in future financial systems. While no immediate policy changes have been announced, the working paper signals a willingness to engage with the evolving landscape of digital finance, provided it can be done in a way that supports stability and compliance [1].

Source: [1] Central Bank of Malaysia Touts XRP Use Cases As Bank Deposits Replacement (https://timestabloid.com/central-bank-of-malaysia-touts-xrp-use-cases-as-bank-deposits-replacement/)