In a recent news story of resentment by the Reserve Bank of Australia (RBA) as it criticized the need to create a digital Australian dollar. Ms. Michelle Bullock, an assistant governor of RBA seems indignant about the new age tech – digital currency as reported by the Australian Financial Review on 24th October.
While speaking at Sibos 2018 – Banking and Financial conference held in Sydney, Bullock supposedly said in her statement that “I am interested to consider what frictions these technologies are designed to address [but] in many cases I just don’t see what the point is.”
With the numerous benefits that the digital currency in place, Bullock elaborated as to how the digital era can help tackle the existing monetary policy problem namely supporting negative interest rates regime. With this, she said that the new concept is still questionable as to how to implement.
Though the digital currency has numerous benefits in place, Bullock is seemingly unconvinced saying “Before the bank could reasonably adopt a new asset like a digital currency, there would need to be a proven use case for it.” Further, she stated that “proponents for a digital dollar should first demonstrate why current payment systems “can’t deliver” the same benefits that distributed ledger has to offer.”
Eventually, she concluded saying that “I’m not convinced that it has a use.”
Amid this, Bullock criticized the digital system saying that the concept is not efficient enough when it comes to comparing with costs with the existing system besides certain efficiency associated with the country’s currency issuance in digital form.
Further speaking to the subject matter, she said: “It isn’t a requirement in the sense the inefficiencies we are seeking to resolve here do not reside in that last final exchange of cash in an existing digitized cash system with corresponding securities — that is actually a highly efficient and high-speed exchange.”
In June 2018, RBA disapproved to issue its own cryptocurrencies saying that Bitcoin (BTC) “fascinating” but “inefficient.” With this, the Head of the RBA’s payments policy, Tony Richards commented in her statement that “issuing the bank’s own token is “not a high priority for us, but it’s something we’re continuing to work on.”
Besides this, Thomas Moser, the Board director of the Swiss National Bank (SNB) Thomas Moser said in his statement that “Cryptocurrencies and blockchain technology are too primitive to consider issuing a state-backed digital currency. Moser compared blockchain in its present condition with the “useless innovation” of compact discs (CDs), stating that “something similar has to happen with BTC. People will only switch to something new if it works better or is cheaper.”