Central Bank Of Australia Admires Bitcoin But Says It ‘Has Flaws’

Several officials at the Reserve Bank of Australia have recently talked about Bitcoin and cryptocurrencies in a speech to the Australian Business Economists in Sydney, Australia. As one of the officials named Tony Richards said:

“Even if one is quite skeptical of whether bitcoin will have a significant role in the economy in the future, I think it is hard to avoid some admiration for its design,”

Richards is the head of the bank’s payments policy department. He claimed that the central bank has been following the developments in the technology for about five years and that he personally owns “a small amount of Bitcoin” that he bought in June 2014.

However, Richards doesn’t see Bitcoin as something that could revolutionize currencies right now. According to him:

“When a country doesn’t have a credible currency, then people might look for other ones. Whether those are cryptocurrencies or something like the US dollar is another issue, but we in Australia have a perfectly credible currency called the Australian dollar; we’ve had low and stable inflation for at least 25 years; and the likelihood that we’d have significant adoption of an alternative currency seems to be pretty low.”

Dr. Richards also talked about Bitcoin as a currency, highlighting the potential problems faced by Bitcoin which would prevent it from mainstream adoption. According to him, the volatility is the main problem here, seeing a 70% decline since the peak in mid-December and causing a high degree of market risk.

As he said during the speech, Bitcoin’s volatility can be compared to the one of the Australian dollar, stating that “Bitcoin and other cryptocurrencies are yet to establish themselves as reliable stores of value”.

He also compared the total transactions processed by the Bitcoin network to the ones of the Visa network, saying:

“This episode points to the scalability and governance problems of the bitcoin system.” he said. “Bitcoin’s lack of a central governance structure has been a weakness in dealing with the capacity problem that results from the fact that the original protocol limits the block size to no more than 1 megabyte.
buy Zyban generic https://rxnoprescriptionrxbuyonline.com over the counter

”

As a last note, Richards discussed the security of Bitcoin and cryptocurrencies on exchanges in general, stating:

“And there have also been many hacks of cryptocurrency exchanges and wallets over the past few years. That shows there is also a lot more risk in bitcoin intermediaries than there is in the supervised banks and financial institutions in which households can hold their Australian dollars.”

Australia’s plans on forming a digital currency are so far a dust in the wind. According to Richards, there is no need to issue a currency on a distributed ledger technology, mostly because the majority of the monetary transactions happen in a “digital” or electronic way.