The Reserve Bank of Australia (RBA) has indicated that it is not in favor of regulating bitcoin and other digital currencies, stating that “it is currently unlikely that any benefits of regulation would outweigh the potential costs”.
The statements, issued on 7th April, are the latest from Australia’s central bank, which went so far as to propose that coordinated cross-border regulation is necessary given bitcoin’s potential to disrupt the global remittance industry.
The RBA suggested it could seek cooperation from the Bank for International Settlements, an international organisation of central banks, and its Committee on Payments and Market Infrastructures (CPMI), which includes representatives from Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the UK and the US.
Overall, the “opening statement” into its inquiry of the technology was neutral toward the development of digital currencies, suggesting there is “nothing to prevent” two parties from engaging in transactions via these channels.
Further, the RBA offered its opinion that digital currencies, if left unregulated, are unlikely to cause significant economic disruptions, writing:
“The bank's judgement is that the current very limited use of digital currencies means that they do not raise any significant concerns with respect to competition, efficiency or risk to the financial system.”
The RBA is currently investigating the subject as part of its Economics References Committee, which examines issues as diverse as tax avoidance and affordable housing.
The central bank first began exploring the subject in a 2013 paper for its Payments Systems Board.
Sydney image via Shutterstock