XRP News Today: Malaysia Central Bank Explores XRP as Potential Payment System Alternative

Generated by AI AgentCoin World
Monday, Aug 11, 2025 4:27 pm ET1min read
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Aime RobotAime Summary

- Malaysia's central bank explores XRP's potential to replace traditional deposits via a Shariah-compliant payment system in its 2025 working paper.

- XRP's low-cost, high-throughput features position it as a viable alternative to conventional banking for near-instant settlements.

- The paper contrasts XRP with Bitcoin/Ethereum, highlighting its superior transactional suitability over volatile store-of-value cryptocurrencies.

- BNM emphasizes balancing innovation with monetary stability, noting risks like disintermediation while considering future pilot programs.

- The exploratory analysis focuses on technical feasibility rather than immediate policy shifts, leaving adoption timelines unspecified.

The Central Bank of Malaysia (Bank Negara Malaysia or BNM) has drawn attention for its recent exploratory working paper, which highlights the potential of private tokens such as

XRP
to serve as a means of payment outside the traditional banking system. The paper, titled “Fundamentals of Modern Money and its Application to Central Bank Digital Currency (CBDC): An Exploratory Shariah Analysis” (WP3/2025), suggests that XRP could, in certain conditions, replace conventional bank deposits or Central Issue Currency (CIC) in the future [1]. The report delves into the technical attributes of XRP, noting its low-cost, high-throughput, and near-instant settlement capabilities—features that align closely with the expectations for a payment-grade digital token [1].

The discussion was brought to a wider audience through a post by crypto commentator SMQKE, who shared the quote from the working paper on social media. The post went viral and triggered interest in how digital tokens could evolve as alternatives to traditional deposit systems, especially in emerging markets [1]. The analysis in the paper explores how private tokens might function similarly to bank deposits, but only under conditions where regulatory and Shariah compliance frameworks are fully addressed [1].

The report also contrasts XRP with more established cryptocurrencies like

Bitcoin
and
Ethereum
. These tokens are described as less suitable for payment systems due to their high volatility, limited throughput, and consensus mechanisms, which make them better suited for store-of-value functions rather than everyday transactional use [1]. This contrast positions XRP as a more viable candidate for payment infrastructure in the context of central bank analysis.

It is important to note that BNM’s working paper is exploratory in nature and does not signal any immediate regulatory or policy shift. The central bank emphasizes the need to balance innovation with monetary stability, acknowledging the potential risks of disintermediation and the impact on monetary control [1]. Still, BNM’s examination of XRP places Malaysia among a small group of central banks exploring the role of private tokens in future payment systems [1].

Looking ahead, the working paper could serve as a foundation for future initiatives, including pilot programs for tokenized payments, integration with CBDC efforts, and the development of Shariah-compliant regulatory frameworks. However, any practical adoption would require a phased approach, including legal reforms, infrastructure development, and consumer protection measures [1]. The paper does not speculate on adoption timelines or project specific outcomes, remaining focused on assessing the technical and regulatory feasibility of XRP in a broader financial context [1].

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