Malaysia's Central Bank Pilots Ringgit-Backed Stablecoin
Malaysia's central bank is piloting a Shariah-compliant, ringgit-backed stablecoin for cross-border payments. The initiative, which also includes tokenized deposits, is focused on streamlining settlement and foreign exchange for Asia's trade corridors. This reflects a broader trend of central banks using tokenized money to address specific pain points in legacy correspondent banking.
- The initiative is being conducted within Bank Negara Malaysia's (BNM) Digital Asset Innovation Hub (DAIH), which was launched in June 2025 to foster responsible innovation in the digital asset space. - BNM is testing two distinct forms of digital currency simultaneously: a ringgit-backed stablecoin for business-to-business settlements and tokenized deposits for wholesale payments. This dual-track approach allows for the evaluation of different models, with the stablecoin representing a potential sovereign digital currency and tokenized deposits exploring commercial bank innovation. - Key institutional players are leading the pilots: Standard Chartered is partnering with Capital A (formerly AirAsia) to develop the stablecoin for B2B use cases, while Maybank and CIMB are independently testing tokenized deposits. - The project's primary focus is on wholesale applications, specifically targeting more efficient cross-border and domestic settlements for businesses and financial institutions, rather than retail or consumer payments. - One of the key considerations being assessed in some of the use cases is compliance with Shariah (Islamic finance) principles. - This stablecoin pilot is viewed as a potential precursor to a wholesale Central Bank Digital Currency (wCBDC), with BNM intending to provide greater policy clarity on the use of these digital assets by the end of 2026. - The initiative places Malaysia alongside other key Asian financial hubs like Singapore, Hong Kong, and Japan, which are also actively experimenting with stablecoins, tokenized deposits, and CBDCs to modernize their payment infrastructures. - This digital currency initiative complements Malaysia's other efforts to upgrade its real-time payments infrastructure, such as the established DuitNow-PayNow QR payment linkage with Singapore.
