The trend of ‘central banks’ talking about cryptocurrencies is warming up once more, with The Reserve Bank of Australia (RBA) and The Reserve Bank of New Zealand (RBNZ) weighing in on the debate.
The pair have moved to debunk rumours that they are investigating in establishing their own central bank digital currency, on the basis that they believe such a project would inevitably damage their current banking system.
According to Reuters, Tony Richards, the head of the RBA referred to Bitcoin as unreliable as a store of value and a means of payment, stating that:
“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.”
Moreover, in reference to an RBA based cryptocurrency:
“Based on our interactions with our counterparts in other countries, it is also not front of mind for most other advanced economy central banks.”
Geoff Bascand, the Deputy Governor for the RBNZ has added:
“A breakdown in the financial system can cause enormous economic and social harm. We could not issue a digital currency if it might undermine financial stability. The payments industry is dynamic, which is good. But the Reserve Bank must be a considered prospector in the exploration for digital currency benefits – we have New Zealand’s currency and financial system at stake.”
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It does seem that their justifications for this lie within a potential risk imposed by cryptocurrencies to the current financial structures of Australia and New Zealand. The good news however is that within these statements, neither the RBA or the RBNZ seem to want to impose stricter regulations on cryptocurrencies. Their stance is very much a case of; yes, cryptocurrencies exist, and people will use them, but ultimately, in terms of national adoption, their advantages do not outweigh their disadvantages, therefore cryptocurrencies could damage current financial structures.
The take home message from this at the very least should be that trading and investing remains a safe activity within both Australia and New Zealand for the time being. Okay, so neither country believes that national adoption is an ultimate goal but at least they don’t wish to hamper the efforts of those investors within their borders, that are shaping a career with the blockchain industry.