Tech

Australia’s central bank is skeptical of digital A$, but that could change

FILE PHOTO: A worker is reflected on the wall of the Reserve Bank of Australia headquarters in central Sydney, Australia
FILE PHOTO: A worker is reflected on the wall of the Reserve Bank of Australia (RBA) headquarters in central Sydney, Australia, March 1, 2016. REUTERS/David Gray

December 8, 2021

SYDNEY (Reuters) – The head of Australia’s central bank is yet to see a strong case for a retail digital currency in the country, although he admits one could emerge as technology and ownership Public preferences are changing rapidly.

In a speech on the payments system on Thursday, Governor Philip Lowe of the Reserve Bank of Australia (RBA) also said regulators were looking into the handling of crypto assets and warned Investors should be wary of the risks when buying.

This comes as the government is undertaking the biggest overhaul of the A$650 billion-a-day payments industry ($466 billion) in a quarter of a century.

Lowe said the development of a digital wallet could allow the exchange of tokens or other forms of digital currency that could be supported by the RBA.

“This will be a form of retail central bank digital currency (CBDC) – or eAUD,” said Lowe. “However, to date, we have not seen a strong public policy case in this direction, particularly given Australia’s efficient, fast and convenient electronic payments system.”

Lowe said a case could emerge as the technology evolves and there will be an advantage for any central bank-backed digital payment token.

He added: “One lesson from history is that privately issued and backed money often leads to financial instability and damage to consumers.

If private digital tokens, or stablecoins, are to be developed, they will need to be backed by high-quality assets and meet high standards of safety and security, he said.

He doubts the need for a cryptocurrency that is not directly linked to the Australian dollar or backed by a particular entity or asset, due in part to their volatility. (1 dollar = 1.3943 Australian dollars)

(Reporting by Wayne Cole; Editing by Sonya Hepinstall)

https://www.oann.com/australias-central-bank-sceptical-on-digital-a-but-that-could-change/?utm_source=rss&utm_medium=rss&utm_campaign=australias-central-bank-sceptical-on-digital-a-but-that-could-change Australia’s central bank is skeptical of digital A$, but that could change

Caroline Bleakley

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