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Cryptocurrencies raise "important questions" for the authorities: The Central Bank of Australia

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The Australian central bank has addressed the growing popularity of cryptocurrency as bitcoin in a parliamentary committee testimony .

The Reserve Bank of Australia (RBA) is joining a growing list of regulatory counterparts around the world to discuss its regulatory position and its views on cryptocurrencies. Earlier this month, the deputy director of the central bank of the Philippines spoke of "the benefit of using virtual currencies like bitcoin" by calling them "fast, close to real time and convenient" .

RBA spokesman Tony Richards said in a testimony before the House Tax and Tax Committee Friday that the central bank had noted "that the members of the Committee had demonstrated 39, interest in digital currencies or cryptocurrencies ". revealed that the authority "has closely followed" the subject of cryptocurrencies and blockchain technology "in recent years."

The central bank did not care about regulating cryptocurrencies as payment instruments, revealed the official.

He declared:

According to the Bank's payment policy mandate, digital currencies do not currently appear to raise any urgent regulatory issues.

The Australian central bank's position on regulating cryptocurrencies as payment methods contrasts with those of its counterparts in Indonesia and Vietnam who have banned their use as a recognized method of payment.

Richards tackled the "substantial increases" in bitcoin and ether prices while suggesting that their determining factors were "speculative demand" and their use in initial coin offerings, a new form of collection. fundamentally fueled by cryptocurrencies. "The use of bitcoin and other digital currencies as an effective method of payment remains relatively limited in Australia, as elsewhere," adds Richards.

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While not revealing any regulatory problems in its use as a means of payment, Richards told the parliamentary committee that cryptocurrencies "can serve as a means of payment in the illicit economy".

"[T] the use of the heir may have implications for tax authorities and raises more important issues for authorities responsible for the prevention and detection of crime," he said. -he declares.

Notably, the central banker admitted that attempts to regulate bitcoin as cryptocurrency are likely to be in vain and, instead, called for regulation of the industry that facilitate it.

He said:

The distributed and cross-border nature of digital currencies like bitcoin means that the regulation of the basic protocols of these systems is unlikely to be effective.

Richards highlighted the measures taken by the People's Bank of China, which has implemented paralyzing regulations to effectively close the cryptocurrency exchanges.

The official admitted a lack of understanding of the "longer term prospects" of private digital currencies such as bitcoin. However, the central banker also addressed the scanning potential of the underlying cryptocurrency technology, the blockchain


Richards told the parliamentary committee:

The most important potential is likely to be in areas where workflows involve many different parties without a trusted central entity, and where current practices are quite ineffective. Some frequently used financial sector use cases include correspondent banking and remittances, as well as trade finance.

A month ago, the Australian Securities and Investments Commission (ASIC), the country's securities regulator, issued guidelines for the operators and regulators. start-ups that raise funds through IFAs.

"In some cases, the OIC will only be subject to the general law and Australian consumer laws regarding the provision of services or products," said ASIC. while recognizing the potential of ICOs to raise funds. "In other cases, the OIC may be subject to the Corporations Act."

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More recently, the Australian government has revealed legislation encouraging an "improved regulatory sandbox" for start-ups and ICO operators to operate without a full license.

Image of Shutterstock's RBA headquarters in Sydney.