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By Sophia Rodrigues
SYDNEY (MNI) - The Reserve Bank of Australia is open to the idea of issuing
Australian dollar using blockchain technology for use with limited private
systems and is exploring such options, Governor Philip Lowe said Wednesday.
The RBA is currently liaising closely with finance technology companies and
financial institutions and is also talking regularly with other central banks
that have tested distributed ledger technologies in some related contexts.
Lowe made the comments at the Australian Payment Summit 2017 in Sydney on
the topic "An eAUD."
"A convincing case for issuing Australian dollars on the blockchain for use
with limited private systems has not yet been made. It is certainly possible
that this type of system could lead to more efficient, lower-cost business
processes and payments," Lowe said.
"My working hypothesis here is that such a case could develop, although we
need to work through a range of complex operational and policy questions," he
Lowe said there is a need to better understand the potential efficiencies
for private business and why it would be preferable for such a settlement system
to be provided by the central bank rather than the private sector and why
privately issued tokens or files could not do the job.
"We would also need to understand why any efficiency improvement could not
be obtained by using the existing Exchange Settlement Accounts and the NPP (New
Payments Platform)," he said.
The RBA also needs to understand whether and how risk in the financial
system would change as a result of such a system. As of now, it remains unclear
which way this could go, he said,
"We are also currently working with some external entities to observe or
participate in proof-of-concepts similar to those of other central banks. So
this area remains a work in progress for us," he said.
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: firstname.lastname@example.org