- Australia’s central bank governor says that privately-issued cryptocurrencies might have their perks if regulated effectively.
- Lowe claimed private money will never achieve the general acceptability of official currencies.
- Australia’s crypto rulebook uses an approach that will regulate crypto exchanges, and not the assets themselves.
Australian central bank governor Phillip Lowe spoke at the G20 finance officials conference in Indonesia that was webcasted live, saying that cryptocurrencies that are privately issued might be better than central bank-issued tokens if the corporations can be controlled effectively.
Lowe went on to say that private money had a number of problems that were unavoidable and that investors would almost always choose official currencies backed by the state. However, this indicated that there was a need for regulation during the time when the private sector developed the concept of an authorized Australian dollar-linked stablecoin.
Defining his support for government activities in the crypto space as being largely for the protection of consumers and for the prevention of criminality including financial fraud, Lowe said that private money would never have the public acceptance that official currencies had.
The private sector in the end is going to be more innovative than the central bank, it’s going to be better at innovating and designing features for these tokens. There are also likely to be very significant costs in the central bank, setting up a digital token system. I think it’s going to be better for the private sector to manage those costs.
In related developments, Australian authorities have recently said that a rule book-style framework is the best method to tackle the risks that come with crypto. Rather than regulating cryptocurrencies directly, their goal is to regulate cryptocurrency exchanges instead.