Central Bank Digital Currency Suffers Major Setback in Australia

Last updated on July 26th, 2023 at 12:15 am

Unlike China, Sweden, and Canada, Australia says Central bank Digital Currency (CBDC) is necessary right now, says Reserve Bank, whether the country would consider it in future remains an unanswered question among cryptocurrency enthusiasts.

CBDCs are on top of the agenda of several countries around the World, but according to a report, the Reserve Bank of Australia (RBA) is taking precautionary measures not to dabble into CBDC as well as private-sector stablecoins.

RBA concerned about strong policy for CBCD

It’s gathered that RBA does not believe there is currently a strong policy case for issuing a CBDC in Australia, pointing to the success of the country’s efficient, real-time New Payments Platform, as such Australians are not relinquishing banknotes as quickly as other citizens.

Therefore, RBA pledged to continue to provide access to banknotes “for as long as Australians wish to keep using them.”

Adoption of CBDC in other countries

According to cointelegraph, three of the most proactive countries in CBDC development-Sweden, Canada and China- are making headway.

In Sweden, for instance, the RBA noted that the decline in cash use there has already been precipitous for several years, spurring the Riksbank to develop — and test —  a potential e-krona.

In Canada, Bank of Canada is already preparing itself in case there is a collapse in cash use for everyday transactions, or threats to monetary policy from the circulation of a private-sector digital currency.

Also Read:  The Legality of Cryptocurrency in South Africa

As for China, the RBA has speculated that the impetus behind the country’s already-advanced CBDC is tied to the domestic prevalence of private-sector e-money wallet providers, such as Alipay and WeChat Pay.

In the RBA’s view, a CBDC could have significant downsides for the country, including higher funding costs for commercial banks.

Similarly in Africa, some African countries are aware of the disruptive powers of cryptocurrencies just as recently, Nigeria’s authority declared that it would be regulating the activities of the crypto-based firms in Nigeria after several years of warming to its citizens that crypto was a fraud.

With the latest development from Nigeria, is believed that the adoption of cryptocurrency in the country would increase while cryptocurrency-based platforms are mandated to register with SEC.

It also means that Africa’s largest economy may be considering CBCD in the near future, though the Security Exchange Commission which issued the statement said nothing about its future adoption.

Author

  • Opeyemi Quadri

    Ope is a finance writer and researcher with 10+ years of experience in content creation. His interests cut across investment, foreign exchange, government policies and politics. Ope is available on Twitter @OpeQuadri.

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