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Malaysia's central bank warns bitcoin is not legal

Staff writer |
Joining a number of regulators world-wide, Malaysia's central bank voiced concern about bitcoin but stopped short of banning the virtual currency.

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"The bitcoin is not recognised as legal tender in Malaysia. The public is therefore advised to be cautious of the risks associated with the usage of such digital currency," Bank Negara Malaysia said in an announcement.

The announcement by the central bank of the Southeast Asian country highlighted regulatory fears about bitcoin and the lack of legal protection for ordinary people as the virtual money exists only in cyberspace and isn't backed by any central bank or government.

Central bank officials around the world have voiced concerns about the potential for money laundering and potential for speculative trading. Chinese regulators, alarmed at bitcoin's potential to skirt the country's capital controls, took a hard line last month and banned third-party payment service providers from using bitcoin for transactions.

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