The country is set to implement an unprecedented restriction on the use of cash.[1] This is doubtless the first time that a country is to implement such bizarre measure to counter the abuse of cash. Somehow, this national policy is implying that cash, at least within the country, is being abused for various illegal activities.
While some business communities are against such drastic measure as it would certainly affect their day to day operation, an idea pops out that they could actually circumvent this policy by adopting the use of Bitcoin and other cryptocurrencies.[2] An ordinary household in Malaysia is said to spend around 8,000 Malaysian Ringgit (RM) per month, way below the 25,000 RM limit. But still, a lot are clamoring to increase the limit as the current proposed limit is way to low.
How is this supposed to be enforced, the honor system? Black markets won't be self-policing for limits on physical cash so this is very obviously an attack on free capital flow. They are forcing residents to depend on third party financial services.
The limit is for physical cash transactions. If you need to transfer make more than 25K RM, then you need to do it electronically.[1] I don't think that's a huge problem for the people.
That's how it starts. They'll make the threshold (in this case ~6,000 USD per month) high enough that most people won't care. Then they will probably add additional restrictions over time.
There's no logical reason for this law besides the introduction of capital controls.