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overnor Phillip Lowe has said that he believes there are risks in dealing with cryptocurrency but that these can be mitigated by strong regulations. He believes private companies, rather than governments, should develop the technology behind cryptocurrency.

These comments come as the country is currently considering its own digital currency, which would be issued by the central bank. It is not yet clear whether Lowe's views on cryptocurrency will influence the final decision on whether or not to issue a digital currency. However, his remarks suggest that the RBA is open to the idea of using private sector technology to develop its own crypto offering.

At a Senate Economics Legislation Committee hearing, Lowe said that the Reserve Bank of Australia is "open-minded" about the potential use of cryptocurrencies but cautioned that there are still many risks associated with them.

If Australia launches its digital currency, it could boost blockchain adoption in the financial sector. This would likely pave the way for other countries to follow suit and could significantly impact the global financial system. This would be a major shift from the traditional role of central banks, which has been to develop and issue national currencies.

It is still unclear what form an Australian digital currency would take at this stage. However, the openness to using private sector technology suggests that it could be based on blockchain – the same technology that underpins cryptocurrency.

While blockchain has many potential uses beyond finance, its use in this sector is currently the most developed. Central banks and financial institutions are already exploring how to use blockchain to streamline processes and reduce costs.

This stance puts Lowe at odds with other central bankers, who have been more cautious about crypto. However, it aligns with the Australian government's recent decision to allow private companies to develop a blockchain-based national currency.

Source:
https://cointelegraph.com/news/australian-central-bank-governor-favors-private-sector-crypto-technology

Posted 
Jul 18, 2022
 in 
Crypto News
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