Reserve Bank of Australia (RBA) official Tony Richards in a speech to the Australian Business Economists in Sydney on Tuesday, expressed his admiration of Bitcoin but thought it would not be adopted into the country’s mainstream financial system.
Dr Richards is head of Australia’s central bank (RBA) and was discussing Bitcoin’s credibility when juxtaposed with Australia’s national currency, the Australian dollar. Richards admitted that he himself was a Bitcoin owner and had been following the currency’s development with interest over the past five years. He saw little possibility for Bitcoin having a real role in the Australian economy, but confessed “some admiration for its design”.
He saw the problems that Bitcoin would have to overcome in order to reach mainstream acceptance in Australia were basically down to scalability and governance issues, plus cryptocurrency’s susceptibility to hackings. Richards also compared Bitcoin to the Australian dollar in terms of the dollar’s stability compared to those of digital currencies which he saw as unreliable stores of value.
“When a country doesn’t have a credible currency, then people might look for other ones,” he said. “Whether those are cryptocurrencies or something like the US dollar is another issue, but we in Australia have a perfectly credible currency called the Australian dollar; we’ve had low and stable inflation for at least 25 years; and the likelihood that we’d have significant adoption of an alternative currency seems to be pretty low.”
The RBA spokesman also referred to the digital nature of Australia’s current banking system, saying he saw no immediate need for a central bank digital currency, although he didn’t rule it out for the future, but admitted that a such a currency would lack some of the “flaws” of Bitcoin.
Despite the warnings, he commented that DLT funds and smart contracts would be useful to non-bank institutions and called cryptocurrencies and distributed ledgers “fascinating developments both from a payments and a broader economic perspective”.
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