No Need For Central Bank Cryptocurrency For Now, Australia Concludes

While several countries and entities are starting to consider launching their own central bank digital currencies (CBDC), Australia might be on the opposite side. The nation’s Reserve bank seems to think that there’s no current need for such a product among customers, as the payment system now is stable enough.

No CBDC in Australia

The Reserve Bank of Australia (RBA) has been exploring the potential need of a “digital Australian dollar,” but it has concluded that there’s currently no need for it. According to the final submission that the bank sent to the Senate, there’s very little demand for a CBDC among customers.

It also says that Australia has a stable banking system at the moment, which has shifted away from cash and checks to electronic payment methods over the last few years. The bank informs that having a low-cost real-time similar method as the New Payments Platform (NPP) reduces the need for a CBDC.

“ […] there would be little demand by households for such an asset, given that they already have good access to digital money in the form of commercial bank deposits that provide payment services, are interest-bearing, and are protected (up to $250,000 per account) by the Financial Claims Scheme.”

It’s also worth noting that the bank worries that if a digital currency is to be implemented and starts receiving widespread adoption, it could decrease the bank deposits, which will ultimately provide fewer funds for loans.

However, the bank’s in-house innovation lab has not fully closed the door for an Australian CBDC by indicating that such a product could be used in a wholesale settlement system in the future.

CBDC’s Mass Acceptance

The RBA’s views on the matter are quite different than what other central banks and establishments think about CBDCs.

As Cryptopotato reported yesterday, the President of the European Central Bank said that they are considering launching their own stablecoin, as otherwise risk falling behind the current trend. Furthermore, they shouldn’t interfere with private projects such as Facebook’s Libra.

Other examples come from South Korea and Russia. The Bank of Korea recently said that it will organize a dedicated task force for additional research on CBDCs. At the same time, the latter is already testing digital currencies backed by real assets in a regulatory sandbox.

China was among the first to react last year when the country’s central bank announced its future state-backed digital currency. Even though it was delayed from its supposed November 2019 launch, the vice-chairman of the China Center for International Economic Exchanges, Huang Qifan later said that the country will be first to have such a stablecoin.