Source: History Insights - Malaysia
Before Malaysia became a unified nation, the region was made up of several states and territories, each with its own currency system.
These currencies were largely influenced by British colonial rule and trade with neighbouring countries.
In the early 19th century, Malaysia’s Malay states used various forms of currency, including gold and tin coins, and foreign currencies. The British started to take control of various parts that would become Malaysia, and their influence spread across trade, governance, and currency systems.
Introduced by the British in 1855 and used until 1939, the Straits Dollar became the first unified currency for the region. This was used across the Straits Settlements, including Penang, Malacca, and Singapore. The Straits Dollar was pegged to the British Pound, and the coins used included silver and copper in various denominations.
Following this, the Malayan Dollar replaced the Straits Dollar in 1939 and was introduced by the British colonial government. It was pegged to the British Pound at a rate of 1 Malayan Dollar equals to 1 British Pound. The Malayan Dollar circulated in the Malay Peninsula, Singapore, and British Borneo until 1939.
Post-war and formation of Malaysia
After World War II, there were significant changes to the currency systems in Malaysia. The Malaya and British Borneo Dollar (also known as the Malaya Borneo Dollar) was introduced to replace the Malayan Dollar between 1946 and 1963. This currency was used in the Federation of Malaya, Singapore, and British Borneo (Sabah and Sarawak). The Malaya Borneo Dollar was also pegged to the British Pound.
In between those years, during the Malayan Emergency (1948-1960), which was a period of conflict between the British and communist insurgents, the British introduced special banknotes to prevent counterfeiting and to undermine communist activities.
The birth of the Malaysian Ringgit
In 1963, the Federation of Malaya merged with Singapore, Sarawak, and Sabah to form the Federation of Malaysia and Bank Negara Malaysia (BNM) began issuing currency notes in June 1967.
Following the gazette of the Malaysian Currency (Ringgit) Act 1975, the name of the unit of currency in Malaysia was legally changed to “ringgit” and “sen”, replacing “Malaysian Dollars” and “cents”.
The term “Ringgit”, meaning “jagged” in Malay, originally referred to the serrated edges of Spanish dollars used in Southeast Asia in the 18th and 19th centuries. This name was adopted to symbolise a new, unified Malaysia.
A cashless Malaysia and the future of transactions
After all the evolutions of the Ringgit over centuries, most of us rarely even hold paper money and coins in our hands these days, after the digitisation of money has paved way for a cashless society.
Gone are the days where you would have to dig through your purses and wallets to find cash or to pay for things. All your money can be used through your personal devices such as smartphones and smart watches.
Credit cards may be the last form of physical payment methods but even they can be stored in your phones now thanks to tech companies ... (.)
Source and image credit: The Rakyat Post
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10/1/2025: 11.02 a.m
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