- The RBA Governor says that the crypto did not have currency characteristics.
- RBA was investigating how the private-sector-issued tokens could work.
According to Reserve Bank of Australia (RBA) Governor, Philip Lowe, the private sector will probably develop a successful stablecoin linked to official currencies rather than government bodies. In a recent official meeting held in Bali, Lowe expressed his support for the government’s efforts to protect the clients from entering into crimes like money laundering.
As per Lowe, cryptocurrencies or digital assets did not have the qualities of a currency. Private money had intrinsic problems, and the investors would always prefer State-backed currencies. However, this meant that regulations were necessary for a private sector innovated Australian dollar-linked stablecoin. He also expressed that private money would never gain the tremendous support that the normal currencies had.
Philip Lowe stated:
New technologies drive waves of innovation, but they also drive waves of speculation. And those waves of speculation often end up in people losing money, particularly people who are not well-informed. I think we’ve seen examples of that just recently.
He additionally added that the crypto things will be utilized as a form of money. It needs regulation, though, otherwise, the government has to deal with a whole host of quite challenging problems.
Better Sector to Develop Digital Tokens
Meanwhile, Lowe said that the Australian Bank was also inquiring about how the tokens issued by private firms operate. This includes if they were backed by ‘high collateral’ like government assets or central bank deposits, or if the issuers were subject to the same regulations as banks.
Furtherly he added that, In the end, the private sector will be more creative than the central bank and it will be better at developing new ideas and devising functionality for the digital tokens, rather than the government bodies.
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