The Reserve Bank of Australia has been ramping up research into central bank digital currencies (CBDCs), but is not convinced “that a strong policy case has emerged in Australia,” said Tony Richards, Head of Payments Policy at the RBA.
Australia’s current payment infrastructure provides consumers with ample safe and convenient options, Richards said, addressing the Australian Corporate Treasury Association on Thursday.However, given payments innovation around the world, providing a new form of digital money could be key to “safeguarding confidence in national monies and the role of fiat currencies at the heart of monetary, financial and payment systems,” as well as preventing big tech monopolies, Richards said.The central bank is also looking into stablecoin regulation along with the Council of Financial Regulators (CFR), the Australian Transaction Reports and Analysis Centre, and the Australian Competition and Consumer Commission, he said. The impetus is that stablecoins could soon play a significant role in “the settlement of transactions in tokenised assets, or that large retail-focused stablecoins could emerge.”If strong regulatory frameworks are set up, stablecoins could be issued by “highly rated entities,” Richards said. Such stablecoins would be safer and faster than existing ones, he added.Once such stablecoins exist, and banks have rolled out CBDCs, “the current fervour for cryptocurrencies” could be challenged, and the use of crypto could become niche, he said.The “speculative trend” around crypto could reverse if households start heeding regulators instead of market hype, and policymakers crack down on energy-intensive crypto mining or transaction anonymity as an enabler of crime, Richards said.Richards also thinks that statistics on the adoption of cryptocurrencies in Australia are “implausible,” adding that the online surveys they are based on might not be representative of the population. He specifically mentioned statistics that claim around 20% of Australians hold crypto, and 5% own dogecoin.Richards also said he has had a crypto wallet since 2014 which initially held some bitcoin, until he converted some to ether in 2018.