Cryptocurrencies will not be widely used in Australia as long as the local financial system operates effectively, the Reserve Bank of Australia (RBA) states in an official document issued on June 20.
According to the announcement from analysts from the RBA's payment policy department, there is "little likelihood of material inclusion of cryptographic curves for retail payments in Australia for the foreseeable future" due to a number of reasons.
In the document, the authors outlined the so-called "scalability trilemma", which means that at best, crypto can only solve two of the three basic functions such as decentralization, scalability and security. The paper states that cryptos will always lack some of the functions in one way or another, which supposedly makes this type of asset less attractive. The document reads:
"In practice, these trade offs are incremental; increasing the scalability of a blockade does not require it to be completely centralized or uncertain, but more centralized or less secure."
Another obstacle to it Widespread acceptance of crypto assets is increasing volatility that RBA said in the document. In this regard, the authors also quoted the highly discussed social media giant Facebook crypto project, which was officially unveiled on June 1
In the document, RBA quoted special cases of attempts at stablecoin launches in Australia and claimed that stablecoin's use of payments "has been very limited" as "has the supply of Australian dollar-linked stablecoins." The financial authority quoted the first Australian dollar (AUD) -specified stablecoin AUDRamp, which went live in September 2018, but completely lost its value after 137 tokens were issued. The authors also cited TrueAUD stablecoin, launched in April 2019 by the TrustToken, claiming that "no tokens appear to have been issued" to date.
The RBA authors conclude that crypto inverters have not developed enough to represent a "convincing proposal that would lead to their widespread use in Australia" as long as the Australian dollar gives a "reliable, low inflation stock of value". They write:
"So far, the development has not sufficiently added to the overall reliability, functionality, and credibility of cryptographic baskets to make them an attractive alternative to established payment systems for daily payments to the population as a whole."
Recently, Australia securities regulator new guidelines for initial coin supply and cryptocurrency, considering cryptocurrency as a financial product that requires involved parties to obtain an Australian financial license.