Malaysia Eyes XRP as Deposit Currency—Is Ripple Locking Real-World Value?

Cryptocurrency is steadily moving from speculation to serious consideration in mainstream finance. A recent working paper from Bank Negara Malaysia (BNM), the country’s central bank, has placed XRP in the spotlight. The document, released in July 2025, explores the changing nature of money and the possible roles of digital assets and central bank digital currencies (CBDCs). In doing so, it suggested that XRP could one day function as an alternative to cash or traditional bank deposits if adoption continues to grow.

This development comes as Ripple, the company behind XRP, expands its payment services across Asia. At the time of the report’s attention in September 2025, XRP traded at $2.73, supported by a strong daily trading volume of $4.9 billion and a market capitalization of $162.6 billion. While the price saw a dip of 3.38 % that day, the token has remained one of the most widely used digital assets for payments and cross-border transfers.

What the Central Bank’s Paper Said

The working paper, titled “Fundamentals of Modern Money and its Application to Central Bank Digital Currency (CBDC),” grouped XRP alongside Bitcoin as a “private digital asset.” According to the paper, private tokens could gain widespread adoption outside traditional banking systems, potentially replacing bank deposits if enough people use them for payments.

An important part of the report was an illustration that placed XRP within the broader money system. It compared XRP to existing categories like central bank reserves and cash, linking it to monetary aggregates such as M1 and M2. This shows that regulators are beginning to view XRP not just as a speculative token but as something that could fit into established financial models.

The paper also mentioned Project Mawar, which is Malaysia’s test project for a central bank digital currency (CBDC). This project explores how new types of digital money could be used with or separate from current financial systems. A main challenge discussed was maintaining liquidity, meaning, making sure money can move easily between crypto and traditional assets without needing a central authority to manage the transfers.

Ripple’s Expanding Ecosystem

This recognition adds to Ripple’s recent momentum. After winning a partial victory against the U.S. Securities and Exchange Commission (SEC) in 2023, which clarified that XRP is not a security for retail investors, Ripple has been able to grow its operations with less legal uncertainty.

Since then, XRP has been relisted on major exchanges and Ripple has secured several partnerships across Asia. Financial institutions are using XRP for cross-border remittances, a process where money is sent internationally, often at much lower costs than traditional systems. Ripple’s On-Demand Liquidity (ODL) service has been central to this growth, enabling instant transfers without relying on pre-funded bank accounts.

Malaysia is not the only country taking notice. In August 2025, the United Arab Emirates approved Ripple payments within its financial system. Combined with Ripple’s application for a U.S. banking license, these moves reflect the company’s efforts to transition XRP from being just another cryptocurrency into a core financial tool.

Market Performance and Predictions

Market reactions to Malaysia’s recognition have been steady rather than dramatic. XRP dropped 7 % over the past week, holding its ground at $2.74. Analysts believe the token has room for growth, especially if adoption by banks and governments increases.

• Technical indicators currently show support at the 200-day Exponential Moving Average (EMA) of $2.50, while the Relative Strength Index (RSI) sits at 53, signaling neutral momentum with potential for upward movement.

• Forecasts vary: some analysts from DeepSeek AI predict XRP could rise to $3.50 to $5.00 by year-end 2025, while others remain cautious, citing ongoing regulatory uncertainties in countries like the U.S.

Despite the mixed predictions, XRP’s strong trading volumes and existing role in real-world financial systems make it one of the more established tokens in the market.

Timeline of XRP’s Journey

• July 2023 – Ripple wins partial SEC case, clearing regulatory uncertainty for retail use.

• August 2023 – XRP is relisted on multiple exchanges.

• July 2025 – Malaysia’s central bank releases its paper highlighting XRP.

• August 2025 – UAE formally approves Ripple’s payment services.

• September 2025 – XRP trades at $2.74, gaining attention across Asia.

The Bigger Picture

Malaysia’s mention of XRP shows how much progress the token has made. It has gone from facing legal challenges and being removed from exchanges to being considered by a central bank as a possible alternative to bank deposits. If more widely used, XRP could change how money is stored and moved, particularly in international finance, which is often slow and costly.

However, there are still challenges. Regulations vary by country, and not all governments may be as accepting of digital assets as Malaysia or the UAE. The paper also pointed out potential issues with decentralized systems, like the lack of a central authority to manage transactions. Still, a central bank discussing XRP alongside official currencies is a significant step. It shows that blockchain technology is increasingly being seen as part of the future of finance.

XRP’s journey mirrors the broader shift in digital assets. From legal issues to gaining international recognition, it is now seen as more than just an investment. Malaysia’s central bank is considering XRP as an alternative to traditional deposits, illustrating how blockchain could complement or even challenge existing financial systems.

Whether XRP can fulfill this role will depend on how widely it is adopted, clear regulations, and continued collaboration with financial institutions. But its inclusion in central bank discussions indicates that cryptocurrencies are becoming part of the global financial landscape.