Blockchain and Cryptocurrency Regulations Are ‘Unnecessary,’ Reserve Bank of Australia

Australian central bank Reserve Bank of Australia’s (RBA) Payments Policy Department officials Tony Richards and David Emery have claimed that the cryptocurrencies and their underlying Blockchain technology do not pose urgent regulatory issues so far. The officials also stated that the central bank will not support any efforts to regulate the core protocols making up the Blockchain networks.

At a hearing before the Australian House of Representatives Standing Committee on Tax and Revenue in late October 2017, the two officials explained why the central bank does not see “pressing regulatory issues” involving the virtual currencies and Blockchain in the near term.

“The distributed and cross-border nature of digital currencies like Bitcoin means that regulation of the core protocols of these systems is unlikely to be effective. From the Bank’s payments policy mandate, digital currencies do not currently appear to raise any pressing regulatory issues.”

RBA’s position on Blockchain and cryptocurrencies

The position of the Australian central bank on the digital currencies and Blockchain technology has been consistent so far. In 2015, the central bank, through the two officials, informed the Australian Senate that the benefits of regulating the cryptocurrencies and Blockchain would not outweigh the possible costs.

The bank, however, proposed the need to introduce a coordinated cross-border regulation due to the potential of Bitcoin and other digital currencies to disrupt the global remittance industry. It also announced its plan to collaborate with the Bank for International Settlements and its Committee on Payments and Market Infrastructures (CPMI) on the issue.

Meanwhile, the two officials have also claimed that Blockchain and the digital currencies are here to stay. They even claimed that industries with lots of intermediaries would greatly benefit from them.

“The greatest potential is likely to be in sectors where workflows involve lots of different parties with no trusted central entity, and where current practices are quite inefficient.”