A key figure within the Reserve Bank of Australia (RBA) has confirmed he holds cryptocurrency in a recent address. Tony Richards, current Head of Payments Policy and former Head of Economic Analysis at the RBA, gave his address regarding “the future of payments”.
Mr Richards gave the address at the Essential Treasurer 2021 event held by the Australian Corporate Treasury Association last week. He said it would be his final address with the RBA as he plans to retire at the end of this year.
In his address, titled “The Future of Payments: Cryptocurrencies, Stablecoins or Central Bank Digital Currencies?”, Mr Richards spoke on what he said has “generated the most discussion, conversation and debate” during his time at the RBA. In speaking on the topic, Mr Richards disclosed that he has had a cryptocurrency wallet since June 2014.
“My initial purchase was a small amount of bitcoin, which I have used for a few small transfers and even a purchase at a café that accepted bitcoin, and then to diversify into some ether in August 2018,” Mr Richards said.
“I stress that the amounts in question are still pretty small,” he added.
Mr Richards also highlights Central Bank Digital Currencies (CBDCs) as a “potential new form of digital money”.
CBDCs are a digital or virtual form of a bank’s currency. Just like banknotes or coins, CBDCs are backed by the government. Effectively, it would be a cryptocurrency with more robust backing.
“There is considerable focus globally on CBDCs, with surveys from the Bank for International Settlements indicating that essentially all central banks are doing work in this area,” said Mr Richards.
According to the Head of Payments Policy, the Bank of the Bahamas was the first central bank to introduce a “full-fledged” CBDC. However, no “high-income” economies have yet taken the leap in issuing a CBDC.
“Reserve Bank staff have also not been convinced to date that a strong policy case has emerged in Australia for a CBDC,” Mr Roberts said.
“The primary reason has been that Australia’s existing electronic payments system already provides households and businesses with a wide range of safe, convenient and low-cost payment services,” he elaborated.
Mr Roberts says the RBA has been “stepping up its CBDC research” and considers “supporting the evolution of payments” to be one of its key strategic focuses.
While it may be a long time before an economy like Australia’s looks to circulating a CBDC, the mere discussion by Mr Roberts speaks to a growing awareness and interest within banks.