Bank of Australia inquires about cryptocurrencies
Bank of Australia inquires about cryptocurrencies
Crypto

Bank of Australia inquires about cryptocurrencies

By Fabiana D'Urso - 22 Nov 2021

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In an announcement aimed at investors, the Reserve Bank of Australia (RBA) has queried the positivity and return of investing in cryptocurrencies.

Australia and the risks associated with cryptocurrencies

The focus and intention to further promote a state-owned digital currency would partly remove the traditional economy’s fear of an unchecked rise of the decentralized economy. And it was during his latest speech to the Australian Corporate Treasury Association, that the head of the RBA, Tony Richards, had his say on the crypto aspect.

He did not spare any cryptocurrencies, including the DOGE and SHIB memecoins, from his conjectures made of doubts and assumptions.

The CEO of the Commonwealth Bank of Australia, Matt Comyn, has instead expressed his side of the story, focusing on the pure investment in cryptocurrencies.

He in fact said:

“We see risks in participating, but we see bigger risks in not participating”.

Comyn tried to make the point that although there is a strong dimension to the volatility of cryptocurrencies, the state cannot ignore the possibility of considering them as an economic asset.

Informing customers and investors about a possible integration of the new technological dynamics could only do good for the country’s economy.

He added:

“Many central banks are looking at the applicability of a central-bank digital currency, what would that look like, what would the benefits be of that. That’s something we’d like to participate in. We think it’s important that Australia is building capability and piloting different versions of the future. We are hopeful we can play a role in that”.

In early November, the Australian Central Bank did make it known that it will take information initiatives for customers interested in understanding how to navigate the world of decentralized digital assets.

australia crypto

 The digital state currency project 

A few weeks ago, Benedict Nolens, head of the Hong Kong Institute’s Innovation Lab, took stock of the importance of implementing a series of tests aimed at creating a digital currency that would see the collaboration of several international banks.

The project had already been initiated by Benoit Coeuré, president of the Bank for International Settlements (BIS).

The aim is to facilitate and improve the speed of cross-border transactions. Especially when there is no correspondent banking system that has the same speed. Many government representatives around the world are arguing this point.

And this is not the first attempt to bring several central banks together on the use of a CBDC on a common linked platform. In September, the Dunbar project was launched, in which the Bank of Australia also participated, again in collaboration with the BIR.

The basis of the project was to facilitate the transfer of digital currencies between different countries via a connected platform. Initial tests showed a 60% return in terms of cost savings and increased transmission speed.

More government control

Some observers point out that carrying out such a project would also mean having greater control over the movement of digital currencies in all the countries that would join. This would consequently lead to a restriction in the use of cryptocurrencies.

If only we wanted to go down the road of China’s prohibitions and bans on mining and cryptocurrencies, with a strong push towards the creation of a state digital currency, we could come to an identical conclusion. 

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