A rare nod from a major regulator just put Bitcoin and XRP in the same sentence as “replacements for cash and bank deposits.” An official Bank Negara Malaysia document circulating on X explicitly names Bitcoin and XRP as private digital assets that could one day function as payment instruments outside the banking system—while also outlining the serious hurdles they must clear. This is not endorsement, but it is a meaningful signal that central banks are actively modeling scenarios where crypto and CBDCs coexist across public and private money stacks.

What Happened

A circulating excerpt from Bank Negara Malaysia’s “Illustration of Public and Private Monies” places central bank reserves, currency, and potential CBDCs alongside private money (bank deposits) and private digital assets. Beneath the diagram, the text mentions new decentralized tokens—naming Bitcoin and XRP—as possible future alternatives to today’s monetary and payment instruments. The same document references Project Mawar, the bank’s CBDC proof of concept, anchoring this discussion within real policy experimentation.

Why It Matters to Traders

When a central bank names specific assets, it reduces narrative uncertainty. That can fuel short-term flows into the mentioned tickers and reshape medium-term positioning around the payments and settlement use case. For BTC, it reinforces the “digital bearer asset” thesis alongside CBDC development; for XRP, it highlights ongoing relevance in cross-border settlement debates. At the same time, the bank flags critical frictions—liquidity, settlement efficiency, and the absence of intermediaries—which will shape how far and how fast adoption can go.

Context and Caveats

The reference signals awareness, not policy backing. The document makes clear that decentralized tokens must overcome significant liquidity and interoperability constraints to complement or substitute bank money. Any shift of day-to-day payments from deposits to tokens would require deep, stable liquidity across rails and robust settlement across assets—an open question even in mature markets. Treat this as a policy scenario, not a green light.

Actionable Trading Angles

• Monitor official BNM communications and Project Mawar updates; policy timelines can catalyze volatility in BTC/XRP.
• Track MYR-linked liquidity: watch spreads, depth, and volumes on regional exchanges and fiat ramps during Asia hours.
• Lean into event-driven strategies: consider defined-risk approaches (e.g., options structures) around policy milestone dates rather than chasing headlines.
• Watch the payments narrative: announcements on remittances or banking partnerships in ASEAN often precede rotation into “utility” narratives.
• For XRP-specific monitoring, focus on on-chain activity, exchange open interest, and funding skews that signal positioning imbalances.

Key Metrics to Watch

• Perpetual funding rates and OI for BTC and XRP, especially during Asia session opens.
• Spot volume and liquidity depth on MYR pairs and regional fiat gateways.
• On-chain fees and transaction counts (stress or improvement in settlement conditions).
• Stablecoin share of regional flows versus bank deposits, a proxy for private-money substitution.
• Regulatory artifacts: consultation papers, sandbox items, and CBDC pilot updates tied to interoperability.

Bottom Line

A central bank acknowledging Bitcoin and XRP as potential alternatives is a narrative catalyst—but the same document highlights the roadblocks that will dictate real adoption. Traders should position around policy-driven volatility, measure liquidity honestly, and let metrics—not headlines—drive conviction.

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