Keeping in mind how the consumer and businesses pay for goods and services, Australia is planning to issue its own digital currency from a central bank and regulate other cryptocurrencies in the nation.
According to notes from Treasurer Josh Frydenberg’s address in Melbourne on Wednesday, The government will hold a public consultation on a widely accessible digital version of cash. Simultaneously it is considering licensing a framework for allowing the transaction of cryptocurrencies in a regulated environment. It hopes to have received direction on both by the end of 2022.
Josh Frydenberg said in the speech that it would be Silicon Valley that will decide the future of the payments if the current structure is not modified. So these are important adjustments that must be anticipated.
The RBA (Reserve Bank of Australia) and some of the country’s largest banks are battling to create payment systems pioneered by tech behemoths like China’s Ant Group Co. Furthermore, Meta Platforms Inc.’s Diem project builds a worldwide payments network that might support its own central bank digital currencies (digital assets whose value is tied to a monetary unit such as the US dollar) or stablecoins.
A potential threat to the monetary regime is faced due to the rapid growth of cryptocurrencies which are unmistakably different from the digital currency issued by central banks, which adds to the urgency for a debate on the handling of cross-border transfer of money. According to the Australian Taxation Office, more than 800,000 Australians carried out digital asset transactions in 2018 alone.
According to Jonathon Miller, general director of crypto-exchange Kraken in Australia, the country needs to promote the sector as a “hub of innovation.” He is optimistic that any new regulations will not be overly burdensome.
He continued that it has been observed that when it is forced too much in other markets, there lies the threat of rejections of the market.
Three separate studies of the country’s payment system and analogous events in the United Kingdom, Singapore, and Canada have prompted the planned adjustments. Furthermore, Australia participates in a Bank for International Settlements trial of central bank digital currencies to develop a more efficient global payments infrastructure.
The Reserve Bank of Australia (RBA) stated on Wednesday that it had finished a study on the use of distributed ledger technology to produce a wholesale version of central bank digital money, as opposed to the government’s proposed retail version. The bank claimed that it would continue to investigate but did not specify whether or not a wholesale currency would be implemented.