The central banks of Australia and New Zealand have declared that they would not consider issuing digital currencies anytime soon. Both banks—the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ)—cited the unfavorable impacts digital currencies may have on their banking systems, as the reason for taking the stance.
The Head of Payment for the RBA, Tony Richards released a text speech in Sydney noting that cryptocurrencies like bitcoin were still volatile and vulnerable to hack and so are not reliable stores of value or means of exchange.
“Nine years after its launch and about five years since it entered the public consciousness, bitcoin continues to have structural flaws that make it unsuitable for many uses, many of which stem from its inefficient verification process.”
“I think the evidence to date is that trustless blockchain solutions are unlikely to be adopted […] Based on our interactions with our counterparts in other countries, it is also not front of mind for most other advanced economy central banks.”
The Deputy Governor of New Zealand’s central bank, Geoff Bascand shared a similar sentiment towards cryptocurrencies
“While digital currencies could make distribution of money safer and cheaper, they could increase the likelihood of bank runs during periods of financial instability.”
Australia and New Zealand aren’t particularly hotbeds for cryptocurrency activities. RBA’s Tony Richard noted that cryptos would not a major part of the bank’s activities and the bank was not considering a national cryptocurrency.
Despite the limitations, RBNZ said its open to exploring cryptocurrencies. I will continue to study their implications and the technology behind them.