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Central Bank Of Australia Voices Support Towards Bitcoin & Cryptocurrency Usage

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The Central Bank of Australia recently spoke out on the ever-increasing popularity of cryptocurrencies such as Bitcoin and Ethereum during a recent parliamentary committee testimony. Following this testimony, the Reserve Bank of Australia (RBA) joined the bandwagon comprising of its sister concerns plying the regulatory field who have been quite active in voicing concerns and sharing thoughts about this dynamic market which houses tremendous potential. The deputy director of Central Bank of Philippines spoke out earlier this month on the “benefit of using virtual currencies like bitcoin” by branding them as “fast, near real-time and convenient.”

Tony Richards, the head of payments at Reserve Bank of Australia recently stated during a testimony made to the House of Representatives’ committee on tax and revenue that the central bank had taken note of the fact “that Committee members have expressed interest in digital currencies or cryptocurrencies.”

The bank official also disclosed that the authority has been closely monitoring blockchain technology and cryptocurrencies “over recent years.” He also revealed that the central bank does not have any concern as regards to the cryptocurrency regulation for making it an optimum payment instrument. He stated, “from the Bank’s payments policy mandate, digital currencies do not currently appear to raise any pressing regulatory issues.”

Also Read: Australian Senate Committe Recommends to Pass The KYC Bill To Regulate Bitcoin Exchanges

The stand taken by the Reserve Bank of Australia on regulating digital currencies as a viable payment mode stands in complete contrast to the regulatory counterparts of Vietnam and Indonesia who have totally denied it recognition as an official payment method.

Richards feels that the “substantial increases” in prices of Ether and Bitcoin was powered by “speculative demand” driving factors along with their usage in ICOs (Initial Coin Offerings) which is a coming-of-age fundraising method being used increasingly by startups.

Richards added that “the use of bitcoin and other digital currencies as an actual method of payment remains relatively limited in Australia, as elsewhere.” Richards clearly stated out to the parliamentary committee that cryptocurrencies “can serve as a means of payment in the illicit economy,”

He added that: “[T]heir use may have some implications for tax authorities and they raise more significant issues for authorities tasked with crime prevention and detection.”

However the banker operating at Australia’s premier bank admitted to the fact that all attempts of bringing in regulation are most likely to turn futile and shall be better to regulate the industry facilitating the same. He said, “the distributed and cross-border nature of digital currencies like bitcoin means that regulation of the core protocols of these systems is unlikely to be effective.”

Also Read:Australia Might Soon Launch It’s own Cryptocurrency – Digital Australian Dollar

Richards drew reference of the stringent regulation imposed by People’s Bank of China, which led to crippling of cryptocurrenct exchanges across its geography. The official agreed to the fact that he does not have a clear understanding of “longer-term prospects” of cryptocurrencies. However he could not undermine the massive potential it has in store just waiting to get unleashed.

Richards stated out to the parliamentary committee that, “the greatest potential is likely to be in sectors where workflows involve lots of different parties with no trusted central entity, and where current practices are quite inefficient. Some frequently suggested financial sector use cases include correspondent banking and remittances, as well as trade financing.”

Securities regulator Australian Securities & Investments Commission (ASIC), stated a month back that, “In some cases, the ICO will only be subject to the general law and the Australian consumer laws regarding the offer of services or products. In other cases, the ICO may be subject to the Corporations Act.”

The Australian government has revealed that it is drafting laws encouraging an “enhanced regulatory sandbox” meant for ICO operators and startups for operating without full licensing requirements.

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