The growth of cryptocurrencies seems to be unstoppable. As such, many countries are carrying out researchers to help them launch their own cryptos. Australia is one of the countries that is already planning to launch its own CBDC to tap into the blockchain. Philip Lowe, the bank’s governor, has said that they are conducting research while exploring the benefits that will accrue to the country if they launch the crypto.
Note that many banks, including RBA, have in the past said that they were looking forward to launching a digital currency that can help reduce reliance on paper money. According to a study carried out by the Bank of International Settlement, more than 80% of central banks have such plans. Even though Australia’s Reserve bank was not one of the banks, it has already put up a team to look for, and explore the benefits and give recommendations. The bank is also looking at the technology and the available policy guiding the implementation of a digital currency.
The governor pointed out that the use of distributed ledger technology would come in handy in the settlement of transactions among banks. He further said that RBA was already working on the concept and that the crypto should serve both the private and public sector actors.
Before Lowe released the statement, Crypto Potato had reported that the Australian CBDC could be accepted on the Ethereum blockchain. This follows the successful partnership between Consensus, RBI, Commonwealth Bank, National Australia Bank, and Perpetual – a financial service company.
The parties were working towards issuing a tokenized CBDC. Market participants could use the digital currency to help in repayment, settlement, and even funding tokenized loans on platforms such as DLT, which are Ethereum based.
On the other hand, the RBA deputy governor Michele Bullock pointed out that Covid-19 has altered RBA’s perspective on the digital currency and that they would get prepared as soon as the demand arrives.