XRP News: BNM Considers XRP as Alternative Bank Deposit

A recent working paper released by Bank Negara Malaysia (BNM) has generated interest by exploring XRP as a potential substitute for traditional bank deposits in the future. The paper, titled Fundamentals of Modern Money and its Application to Central Bank Digital Currency (CBDC): An Exploratory Shariah Analysis (WP3/2025), delves into the possibility of private tokens operating independently of the mainstream banking system and holding similar functionalities to deposits [1].

BNM’s interest in XRP lies in its effectiveness as a payment system, thanks to its low-cost transactions, rapid transaction processing, and immediate settlement capabilities. These features position XRP as a strong candidate for a tokenized payment infrastructure that could, pending specific conditions, serve as an alternative or supplement to traditional deposit structures [1]. This viewpoint sets XRP apart from other significant cryptocurrencies.

The working paper explicitly states that Bitcoin and Ethereum are ill-suited for utilization in payment systems due to their high volatility, limited transaction scalability, and energy-intensive consensus mechanisms. Despite serving as valuable assets of stored value and operating with decentralized frameworks, Bitcoin and Ethereum do not meet the practical requirements for everyday transactions [1]. This underscores the strategic evaluation of which tokens are better aligned for integration into future payment frameworks.

BNM’s paper unfolds as an exploratory venture rather than a definitive guideline, showcasing the central bank’s ongoing evaluation of the potential applications of private tokens without binding themselves to any specific policies. The paper underlines the necessity to address regulatory and Shariah compliance standards before any practical implementation of private tokens can be actualized [1]. BNM’s careful maneuver reflects the broader challenge confronting central banks globally: how to navigate innovation while upholding monetary stability and oversight.

Examining the future landscape, the paper outlines feasible avenues for collaboration, including conducting pilot programs for tokenized payments, merging with BNM’s CBDC projects, and formulating Shariah-compliant regulatory structures. However, these endeavors would necessitate a series of comprehensive alterations, ranging from legal amendments to consumer protection protocols, before private tokens such as XRP could viably replace or supplement conventional banking operations [1].

In contemplating XRP as a plausible substitute for bank deposits, Malaysia emerges as one among a limited alliance of central banks actively deliberating the potential role of private digital tokens in forthcoming financial infrastructures. Although no imminent policy shifts have been disclosed, the working paper signals a readiness to engage with the evolving realm of digital finance, provided that it fosters stability and adherence [1].