Reserve Bank of Australia Considers Ultimate Ethereum-Based Crypto

UTC by Jeff Fawkes · 3 min read
Reserve Bank of Australia Considers Ultimate Ethereum-Based Crypto
Photo: Reserve Bank of Australia / Flickr

The Australian Central Bank has its own blockchain lab since 2018, where they test Ethereum-based private blockchain. The platform securely emulates the Central Bank and commercial banks conducting transactions with each other.

Blockchain technology is becoming magic during 2020 when different powerful entities show interest in regulated currencies. Australian crypto gigs won’t be too happy, but this is coming, guys.

Reserve Bank of Australia Plays with Ethereum

The RBA prepared a PDF doc and sent it to the Australian Senate. It says that there is a potential for using blockchain-based apps for household purposes. Analysts say that due to the stable banking system in Australia, there is no demand for a centralized cryptocurrency. However, during the economic troubles, it’s all different. People flee to digital currencies, and so-called central bank digital currency (CBDC) could absorb the cash from people who withdraw from the bank accounts.

However, this will cut some of the bank’s abilities to give loans and fund household goals. The banks will have to innovate. The RBA is already doing it, they have created a blockchain lab in 2018. Their division is testing a private Ethereum alike blockchain. Within such a system, they simulate a Central Bank that is issuing tokens to the Commercial Banks. The tokens can be redeemed in the Central Bank, and the banks can send the tokens to each other.

The paper mentions Atomic Transactions and Programmable Money. Journalists asked the RBA about classic cryptocurrencies. Their opinion is that they ‘do not provide the usual functiоns of money’.

Crypto Regulation Is Better than Restriction

Digital currency is of great interest to regulators and central banks. In 2020, American stock markets crashing, and investors flee to cryptos, gold, and oil. The world is at the brink of collapse, and the cryptocurrency field is full of shady people. However, Central Banks can step in the game by creating centralized stablecoins with flawless code and gold backing.

In Turkey, the lawmakers did a great job of inventing the crypto-related restrictions. Qatar has banned cryptocurrencies, virtual assets and subsidiaries with no exceptions. However, Australia will classically regulate cryptocurrencies: make profits. Yeah, the field is very profitable, the Australian government has been taxing the crypto traders since 2015, with a substantial 10% income tax. Famous Australian traders like the Bitcoin Babe do podcasts or blog posts regarding this.

Interesting to note that the ACCC’s investigation showed that Australian banks are having no conspiracy against cryptocurrency users:

“ACCC chairman Rod Sims wrote to Nationals Senator Matthew Canavan, who had initially requested an investigation, telling him there was no evidence that banks had colluded before deciding to close the accounts of bitcoin companies.”

More than that, when Australian traders comply with KYC/AML regulations, the banks can still close the account of the famous trader. Here, Bitcoin Babe shows probably the most controversial KYC/AML documents you can find in Australia. The local ANZ bank has sent the Localbitcoins trader the documents stating that she has no bank account anymore. This is strange considering that she has been paying all the taxes and her business fits the Australian KYC/AML recommendations.

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Jeff Fawkes
Author Jeff Fawkes

Jeff Fawkes is a seasoned investment professional and a crypto analyst. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.

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