A senior official in the Reserve Bank of Australia (RBA) said that bitcoin is not widely spread in the country. As the main reasons he called the volatility of digital currency and the stability of the Australian dollar.
During a speech at the event, Australian Business Economists Tony Richards (Tony Richards), the head of the facility payment policy the RBA stated that the bitcoin is unlikely to be much widespread in Australia, New Zealand and adjacent Pacific Islands.
According to Richards, one of the main reasons bitcoin is supposedly doomed to failure in Australia, is the stability of the national currency — Australian dollar:
«The stability of the Australian dollar means that the bitcoin is unlikely to get wide distribution in the country. When the state has no reliable currency, people can look for other options. […] Are these cryptocurrency something of a dollar – that’s another problem, but we in Australia are absolutely reliable currency called the Australian dollar. We can boast of low and stable inflation for at least 25 years; and the likelihood that we will have a significant adoption of alternative currencies, it seems pretty low».
However, when you look at the six-month charts of bitcoin and the Australian dollar against the U.S. dollar found disturbing (for Richards) similarities. So the Australian dollar from January 2018 was trading against the U.S. dollar:
But as bitcoin (BTC) was trading against the U.S. dollar over the same period:
While it is undeniable that the performance of bitcoin over six months of 2018 was not the most encouraging, it seems that «quite credible currency» also moves down in a similar way, albeit much slower.
Richards also noted that «the local use of bitcoin is currently so limited that the RBA doesn’t notice its impact on monetary policy of the country.» It is incredibly «limited» use of cryptocurrencies is still more than enough to tax Department of the country has classified bitcoin and other cryptocurrencies as assets and charged
for operations with them tax rate on capital gains (CGT).
Lack of understanding of the basics
Richards noted that in addition to the risks of volatility, there are also risks of using bitcoin due to intermediaries:
«In addition, intermediaries in payment with bitcoins carry much more risk than controlled by banks and financial institutions where people can store their Australian dollars».
Let’s take a step back and look at the title of the White paper Bitcoin: «Bitcoin: P2P electronic cash system». In other words, the absence of intermediaries is one of the foundations of Bitcoin.
If Richards has a view of is the blockchain – the underlying technology of Bitcoin, and compares its safety with banks, I can name a lot of arguments that eventually will lead to the opposite conclusion — and a long time Bitcoin proves it.
Bitcoin is stable, unlike traditional payment systems. This entry
they tweeted after Visa, one of the largest suppliers of payment solutions in the world, has experienced problems because of «system failure», resulting in thousands of users around the world are unable to access their funds.
Let’s go further and assume that Richards was referring to the purses that people use to store their private keys. If so, then his comparison is inappropriate. He will have to compare them with the usual purses, where people hold Fiat money, and one can endlessly speculate how well this wallet can protect your money against theft or loss.
In General, the skepticism of Richards understandable – few representatives of the Central Bank is ready to accept the possibility of the domination of alternative currencies. One can only hope that officials in time to see the light and be able to use technology to improve their own systems.