The Reserve Bank of Australia is exploring the possibilities to introduce a digital version of the Australian dollar. The regulator claims that central bank-issued digital currencies are less volatile.

In a speech in Sydney, Tony Richards, the head of payments policy at the Australian central bank, has suggested that electronic money and cash will coexist in the future, and the most convenient way to adopt digital currency is centralised and regulated issuance:

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

He remembered that financial regulators in different countries, like the Bank of England and Bank of Canada, were already undertaking researches on the possibility of digital currency issuance.

At the same time, Richards voiced his belief that decentralised emitted currency like bitcoin would not substitute “well established, low inflation national currencies within individual economies.” One of the main disadvantages of the digital currency mentioned, according to Richards, is its high volatility.

“Bitcoin has, however, served to stimulate interest in the potential of distributed ledgers extending to the possibility of central bank issued digital currencies.”

It seems that monetary authorities are looking for the way to remain in power while the decentralisation trend in the finance sector threatens to push them out. Earlier this month the People's Bank of China revealed its interest in digital currencies, emphasising however that only national central banks should undertake the issuance charge.

Elena Platonova