The Central Bank of Malaysia (BNM) announced that it will conduct pilot tests of the Ringgit stablecoin and tokenized deposits in 2026 to evaluate their impact on monetary and financial stability. Under the Digital Asset Innovation Hub (DAIH), three initiatives have been launched: Standard Chartered Bank and Capital A are exploring enterprise-to-enterprise stablecoin settlement, while Maybank and CIMB are testing tokenized deposit payments. The tests will cover domestic and cross-border payment scenarios, with some use cases considering Islamic law.
Three Major Testing Plans: BNM’s Stablecoin Strategy Deployment
This year, BNM will introduce three initiatives under its Digital Asset Innovation Hub (DAIH) to test the application of Ringgit stablecoins and tokenized deposits in wholesale payment use cases. These projects will examine domestic and cross-border payment scenarios, including settlement of tokenized assets. The specific plans demonstrate that BNM is adopting a comprehensive and pragmatic testing approach.
The first plan, led by Standard Chartered Bank and Capital A, will explore enterprise settlement using Ringgit stablecoins. Standard Chartered is one of Asia’s leading international banks with deep expertise in cross-border payments and trade finance. Capital A, the parent company of AirAsia, Malaysia’s largest airline group, indicates potential applications of stablecoins in travel and aviation. Enterprise settlement is a key use case for stablecoins, capable of significantly reducing time and costs in cross-border transactions.
The second and third plans, led by Maybank and CIMB respectively, will test payments using tokenized deposits. Maybank is Malaysia’s largest bank, and CIMB is a leading regional bank group in Southeast Asia. Tokenized deposits are similar to stablecoins but are typically issued by commercial banks rather than independent issuers and may be directly linked to bank deposit accounts. This model offers advantages in regulatory clarity and integration with existing banking systems.
The trials will be conducted in controlled environments, involving collaborations with ecosystem partners, including corporate clients of financial institutions, the Securities Commission Malaysia, and Khazanah Nasional. This multi-party framework ensures comprehensive testing. Corporate clients will provide real payment needs, the Securities Commission will ensure compliance, and Khazanah Nasional, as the sovereign wealth fund, will offer strategic support.
Some use cases will also evaluate factors related to Islamic law. This is a unique aspect of BNM’s stablecoin plans. Malaysia is a Muslim-majority country where Islamic finance is a significant part of the financial system. Islamic law prohibits interest (Riba) and excessive uncertainty (Gharar), requiring financial products to be backed by tangible assets or based on profit-sharing. For stablecoins to be compliant with Islamic law, their design must meet these requirements.
BNM’s Three Major Testing Plans
Standard Chartered + Capital A: Ringgit stablecoin enterprise settlement, focusing on aviation and trade sectors
Maybank Testing: Domestic payment applications using tokenized deposits, exploring on-chain bank deposits
CIMB Testing: Cross-border payments with tokenized deposits, studying compatibility with Islamic law
This multi-pronged strategy covers various dimensions of stablecoin development: different issuance models (independent issuer vs. bank-issued), different application scenarios (domestic vs. cross-border), and different regulatory frameworks (conventional vs. Islamic finance). This comprehensive testing will provide BNM with valuable data and experience to inform future policies.
2026 End-of-Year Guidance Commitment: Southeast Asia’s Benchmark for Stablecoin Regulation
BNM states that these tests will enable it to assess the impact on monetary and financial stability and to formulate policy directions. The central bank plans to clarify the use of these tools by the end of 2026. This timeline is crucial for market participants, as it offers a clear schedule for policy certainty.
The current global stablecoin regulatory environment is highly fragmented. The US recently enacted a stablecoin regulatory framework, the EU’s MiCA regulation has come into effect, Singapore’s MAS has its own stablecoin rules, and other countries have varying standards. Against this backdrop, BNM’s commitment to provide clear guidance by the end of 2026 demonstrates its leadership role in Southeast Asia’s regulation.
What might this guidance include? Based on international norms and BNM’s testing focus, it could cover: capital requirements and reserve standards for stablecoin issuers, accounting treatment and regulatory classification of tokenized deposits, AML and CFT requirements for cross-border stablecoin transactions, consumer protection and dispute resolution mechanisms, and specific compliance standards for Islamic financial products.
This work may also lay the groundwork for future integration with ongoing wholesale central bank digital currency (wCBDC) projects. Wholesale CBDC is mainly used for large-value interbank settlements, complementing retail-facing stablecoins. Malaysia might envision a layered digital currency ecosystem: wCBDC for interbank settlement, stablecoins and tokenized deposits serving businesses and retail users, interconnected through interoperability protocols.
From a timeline perspective, testing throughout 2026 with guidance issued by year-end suggests that the official launch of the Ringgit stablecoin could begin in 2027. This schedule aligns closely with progress in Singapore, Hong Kong, and other competitive financial centers, indicating Malaysia’s proactive stance on digital asset regulation.
DAIH Innovation Hub: A Regulatory Sandbox with 30 Participating Institutions
Launched in June 2025, DAIH is part of BNM’s responsible innovation initiatives in the digital asset space. Since its inception, BNM has collaborated with over 30 domestic and international institutions from banking and non-banking sectors to identify and prioritize high-impact use cases. The participation of 30 institutions signifies a sizable engagement, reflecting strong industry interest in digital assets.
Entry into the hub requires adherence to principles such as credible value propositions, thorough preparedness, sound governance, and compliance with AML/CFT standards. These criteria ensure the quality of participating institutions and the seriousness of testing projects. “Credible value proposition” means projects must address real problems rather than purely technical demonstrations. “Thorough preparedness” implies clear implementation plans and technical capabilities.
DAIH operates similarly to a regulatory sandbox but with a more structured and goal-oriented approach. Participants can test innovative financial products in a controlled environment, with temporary regulatory exemptions but close supervision and periodic reporting. This model is increasingly popular globally, balancing innovation with risk management.
Recently, BNM issued a discussion paper on asset tokenization, aiming to guide market participants exploring similar initiatives. The paper likely covers legal frameworks, technical standards, risk management, and market best practices for asset tokenization. Publishing this discussion document transparently invites feedback and suggestions from industry stakeholders.
BNM states it will continue engaging with potential applicants and focus on supporting projects already within the hub. This indicates DAIH is not a one-off project but an ongoing platform for innovation. Future expansion may include more institutions and broader digital asset categories beyond stablecoins and tokenized deposits.
Southeast Asia Stablecoin Race: Malaysia’s Regional Ambitions
BNM’s stablecoin testing must be viewed within the broader context of Southeast Asia’s financial center competition. The MAS in Singapore launched its stablecoin regulation framework in 2023, attracting license applications from major issuers like Circle and Paxos. Hong Kong’s HKMA is also advancing stablecoin legislation. Thailand’s central bank is exploring digital currency projects.
Malaysia’s unique advantage lies in its status as an Islamic finance hub. With over 1.8 billion Muslims worldwide and Islamic financial assets worth trillions of dollars, Malaysia could position itself as a leader by issuing compliant stablecoins aligned with Islamic law. Such “Islamic stablecoins” could attract regional and global attention, creating a differentiated niche.
Economically, Malaysia is Southeast Asia’s fourth-largest economy, with a GDP of about $400 billion. While not as prominent as Singapore’s financial hub, Malaysia benefits from a larger population (~33 million) and a broader real economy. If the Ringgit stablecoin gains widespread domestic adoption, its scale could surpass that of Singapore dollar stablecoins.
Cross-border payments are a key use case. Malaysia’s trade with Indonesia, Thailand, Singapore, and other ASEAN neighbors is substantial. Traditional cross-border payments via SWIFT can take 2-3 days and incur high fees. Blockchain-based Ringgit stablecoins could enable instant settlement and low-cost transfers, significantly boosting trade efficiency.
