Central Bank of Australia Decided Not to Regulate Bitcoin

The Reserve Bank of Australia is convinced that the development of such digital currency as bitcoin won’t endanger the financial system.

Photo: Jennifer/Flickr

Photo: Jennifer/Flickr

On Tuesday, after months of the purview of an Australian Senate Inquiry, it was told during a public hearing that at that stage Bitcoin wasn’t going to be regulated in Australia.

Tony Richards, the RBA’s head of payments policy, and David Emery, the department’s senior manager, claimed that the use of digital currencies was still limited in Australia:

“Given the very limited use and acceptance of digital currencies in Australia, digital currencies do not currently raise any issues for the Bank in terms of the Bank’s monetary policy and financial stability mandates.”

In contrast, the U.S. included Bitcoin into their financial system considering it as an important part of the market economy. For example, in the State of Utah the Bitcoin-friendly bill was passed a month ago and now allows the residents to pay their taxes in Bitcoin.

Still, according to the opening statement issued by the RBA, the national exchequer will carry more costs than benefits, if decides to regulate it. Anyway, the RBA also stated that in case the use of digital currencies increases considerably, the Bank will look towards introducing regulation:

“However, the Bank will continue to monitor the use of digital currencies. In the event that the use of a particular digital currency was to grow significantly and to raise public interest concerns, the Bank would consider whether it would be desirable and feasible to ‘designate’ it as subject to regulation and to then impose standards on participants in that system.

The Bank will also be assessing whether the regulatory framework can accommodate alternative mediums of exchange such as digital currencies, consistent with the observations of the final report of the Financial System Inquiry.”

So, as far as the Bank sees no need to regulate the payments system aspects of digital currencies, the international character of such systems could restrict its ability to act unilaterally. That’s why, according to the RBA, it’s necessary to coordinate actions.

“One vehicle for coordination would be through the Committee on Payments and Market Infrastructure (CPMI) at the Bank for International Settlements, of which the Bank is a member. The CPMI monitors developments in digital currencies,” claims the statement.

In conclusion, it’s necessary to say that the RBA mentioned its concerns over “issues relating to taxation, Anti-Money Laundering and Counter-Terrorism Financing Rules and consumer protection.” According to the opening statement, that areas are “outside the Bank’s realm of expertise and responsibility.”

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