The Reserve Bank of Australia Talk Cryptocurrencies

During a recent Australian Business Economists forum, the Head of Payments Policy Department for the Reserve Bank of Australia, Tony Richards, shared some of this thoughts on crypto currencies and distributed ledger technology. Richards stated that he was impressed with some aspects of crypto currencies, but there are some flaws. These flaws in the design in conjunction with limited crypto usage in Australia show that Australia has no need for a digital version of the Australian Dollar, according to Richards.

Australia is known to be progressive when it comes to technology. They adapt easily to technology and like to stay ahead of the curve. In relation to Bitcoin and other cryptocurrencies, the Australian government has maintained an open attitude towards the purchase and use of the digital assets. However, Richards states that most crypto users are those who do not trust central banks, which is not a problem in Australia. Although Quantitative Easing has occurred for the last 10 years, inflation remains low for the Australian Dollar. Richards continued to say that "the Australian Dollar boasts of over 25 years of stability and low inflation which makes the need for an alternative currency low."

In addition to adoption use, there is also the question of whether cryptocurrencies are money. Money should have 3 key aspects...Store of Value, Medium of Exchange, and Unit of Account. Richard believes that for store of value, cryptos have been too volatile to be considered money. Unit of exchange- depends on performance. When crypto prices were rising, many more businesses were willing to accept as payments, but this changed once prices began to drop significantly. Unit of Account- Richards states that very few businesses are accepting Bitcoin and other cryptocurrencies as payments. "In situations where there are trusted central entities in well-functioning payment systems, there may be little need for cryptocurrencies.” So at this time it appears that the Reserve Bank of Australia will not be instituting a digital Australian Dollar using the blockchain, however, they remain open to the idea of integrating some aspects of the market to the central bank.

Looks like we will have to wait for now about a country incorporating their currency with block chain technology. However, it shows that Reserve Banks respect block chain technology and they are keeping their eye on it. Maybe in the near future we will see an honest currency that is on a public ledger and backed by the block chain. Please share your thoughts and thanks for reading.

https://www.crypto-news.net/should-the-reserve-bank-of-australia-issue-a-digital-currency/