Author: Gan Jia Ci
On 26 June, Australia’s central bank claimed that it would not be launching its own cryptocurrencies during a speech on Cryptocurrencies and Distributed Ledger Technology.
Focusing on Bitcoin, head of payments policy department Tony Richards preferred to refer to cryptocurrencies as “cryptoassets” instead of “currencies” as they “share very few of the attributes of other currencies or monies”.
Richards spoke to the Australian Business Economists in Sydney, where he mentioned that the central bank does not intend to launch its own tokens.
“It’s not a high priority for us, but it’s something we’re continuing to work on.”
Richards argued that cryptocurrencies are not “reliable stores of value” as he compared the price volatility of Bitcoin to the Australian dollar.
“And there have also been many hacks of cryptocurrency exchanges and wallets over the past few years. That shows there is also a lot more risk in bitcoin intermediaries than there is in the supervised banks and financial institutions in which households can hold their Australian dollars.”
While he did acknowledge the success of Bitcoin, he went on to reiterate his stance,
“However, nine years after its launch and about five years since it entered the public consciousness, Bitcoin continues to have structural flaws that make it unsuitable for many uses, many of which stem from its inefficient verification process.”
Nevertheless, Richards also conceded that cryptocurrencies, for the most part, have yet to raise any major issues for the central bank and its monetary policy and financial stability mandates, especially since they are not as popular in Australia. “There are only very limited links from cryptocurrencies to the traditional financial sector,” he explained.
On the other hand, Australia’s neighbouring country also shares a similar outlook on cryptocurrencies. The Reserve Bank of New Zealand (RBNZ) stated that it remains unclear whether a central bank digital currency will generate definitive benefits.