Australia Urged to Launch CBDC ASAP as Digital Landscape is Changing Quickly

The rapidly changing global digital landscape means worldwide banks and regulatory bodies are looking to either regulate cryptocurrencies in their respective countries or launch their own CBDCs (Central Bank Digital Currencies).

Australia Under Pressure to Launch CBDC

While the RBA (Reserve Bank of Australia) is still researching CBDCs, other banks across the world are moving fast with their plans to launch digital currencies.

A week ago, the local government of the Chinese Xiong’an region announced it would pay its residents in digital Yuan, starting with construction workers.

The case for Australia is the back-and-forth of the RBA regarding a future CBDC, along with the unclear regulatory environment for cryptocurrencies. Unsurprisingly, many in the blockchain and crypto community in general have criticised Australian monetary authorities for not taking digital currencies seriously, something that seems to affect the banks as well.

We need to think, as a country, ‘what is crypto, how could it be used, and do you trade it?’ If it is something that should be traded safely, [how do] we make it safe? Those are the issues we need to think about, and quite quickly, because people are making a livelihood out of trading.

Ross McEwan, CEO, National Australia Bank

BIS Backing Stablecoins

The Bank of International Settlements (BIS) – dubbed the central bank for central banks – has shown support for the development of CBDCs in an attempt to modernise traditional finance and ensure “Big Tech” does not take control of money, according to a report from Reuters. 

This has rushed other banks to explore the technology of CBDCs as cryptocurrencies are booming and the world is gradually transitioning to digital payments. Further, at least 56 central banks and monetary authorities are exploring digital currencies.

Impact of Blockchain and DeFi on Traditional Finance

Australian venture capitalist Mark Carnegie recently spoke on the ABC’s The Business cryptocurrencies special about how DeFi and blockchain are changing the landscape for traditional finance.

Carnegie, who launched a crypto fund two months ago, said the idea behind cryptocurrencies is to bring on a decentralised financial world and not to focus solely on one crypto, referring to Bitcoin maximalists. When asked about the safety of DeFi, he said:

Look at the GFC [Global Financial Crisis of 2007]; in the end, the government had to step in to guarantee the world’s financial system. It’s safe because they decided to print money, it’s not safe because it’s safe, it’s because you’re essentially charged huge amounts of insurance embedded in all the fees you pay.

Mark Carnegie

Carnegie added that wholesale investors were coming into his fund looking for a mainstream fund manager willing to go into digital assets.