Reserve Bank of Australia Examining Digital Currencies and Distributed Ledgers

In a speech given at the Payments Innovation 2016 Conference in Sydney, Tony Richards, Head of Payments Policy Department at the Reserve Bank of Australia, mentioned that digital currencies and blockchain-based payments systems are being examined by Australia’s central bank.

In his speech, Richards even went on to suggest that at some point in the future the Australian dollar itself may be converted to a digital format, “in the more distant future it is even possible that we may we see a digital version of the Australian dollar.” said Richards.

While Richards’ said that the central bank is taking a closer look at the technology that underlines the Bitcoin digital currency, he also made it clear that the bank is not “actively considering” the launch of any digital currency at this time.

Like many other central bank governors and heads of state, Tony Richards believes that a central-bank-issued digital currency is a viable idea, if the distribution of the currency is under the control of certain entities.

“A plausible model would be that issuance would be by the central bank, with distribution and transaction verification by authorised entities (which might or might not include existing financial institutions).”

He also pointed out the risks involved in the issuance of national digital currencies, citing potential cybersecurity complications, “Given the various cybersecurity and cryptography risks involved, my personal expectation is that full-scale issuance of digital currency in any country, as opposed to limited trials, is still some time away.” said Richards.

Although Richards doesn’t see digital currencies going mainstream anytime soon, he does seem very fond of the potential applications of blockchain technology in revamping Australia’s securities clearing infrastructure.

He said:

“As the overseer of clearing and settlement facilities licensed to operate in Australia, the Bank obviously has a keen interest in the plans of the ASX Group to explore the use of distributed ledgers.”

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