Australian Central Bank Still Not Sure About Cryptocurrencies

According to the governor of Australia’s Central Bank, regulators are still trying to ascertain the risk levels of crypto-assets. 

RBA Governor Questions Crypto In Retail

The Reserve Bank of Australia (RBA) has always put up strong defenses against the influx of crypto adoption in the country. The RBA’s Governor Philip Lowe has recently commented on the matter while talking about different payments systems on Thursday. He noted that regulators were currently reviewing the industry. He also issued a warning to crypto investors, asking them to be aware of the risks posed by these assets. Furthermore, Lowe also admitted that he personally did not understand the need for a digital currency for retail in Australia. He questioned the need for crypto that is not directly linked to the Australian dollar or backed by a particular entity or assets. According to him, privately issued or backed currencies always lead to financial instability and losses. Therefore Lowe believes that for private digital tokens or stablecoins to gain legitimacy, they would need to be collaterized by high-quality assets and maintain high standards for safety and security. 

Customer Preferences Can Evolve: Lowe

At the same time, he also claimed to maintain an open mind towards the industry with the changing trends of public needs, preferences, and technology. He believes that the growth of digital wallets could bring wider acceptance of digital currencies backed by the RBA. 

Lowe said, 

"This would be a form of retail central bank digital currency (CBDC) - or an eAUD. To date, though, we have not seen a strong public policy case to move in this direction, especially given Australia's efficient, fast and convenient electronic payments system."

CBA Continues Crypto Projects

Despite the antagonism towards crypto from the RBA, the Commonwealth Bank of Australia (CBA) has supported the country’s crypto developments. In early November, the CBA announced a partnership with crypto exchange Gemini and blockchain analytics firm Chainalysis to offer crypto retail services through the CommBank mobile app. This will be the first time a major financial institution offers crypto exchange and custodial services to the public. As the largest bank in Australia, the CBA is uniquely positioned to reach out to the most number of Australians with this initiative. The bank’s extensive customer base will now be able to hold and trade in ten specific cryptocurrencies, including ​​Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Publication date: 
12/09/2021 - 13:00
Author: 
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