Category: Banking

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Russia Central Bank Moves to Ban Investment in Crypto

According to a report by Reuters, the Central Bank of the Russian Federation (CBR) is looking to ban crypto investments. In a directive issued earlier this week, the bank has also barred mutual funds from investing in digital currency.

Russia Rebels Against Crypto

The Russian Federation, which has long argued against cryptos – citing concerns of risks to financial stability, money laundering, and possible financial terrorism – has yet again spoken its mind.

After issuing concerns over the security implications associated with cryptos, the federation eventually gave them legal status in 2020 but banned their use as a means of payment. Following this, the central bank is now in talks with market players and experts regarding a possible overall ban on cryptos.

Should a ban be approved by lawmakers, it would apply to new purchases of crypto assets but not those made in the past. Russia’s current stance amounts to a “complete rejection” of all cryptos, a source close to the bank has said.

According to the bank, the annual volume of crypto transactions conducted by Russians amounts to about US$5 billion, with CBR first deputy governor Ksenia Yudaeva claiming the use of cryptos lowered the efficiency of monetary policy. According to Yudaeva, “The situation in developed market countries more and more resembles the so-called shadow financial system.”

CBR Seeks to Ban Mutual Funds from Investing in Crypto

Adding to the bad news for investors, Russia has issued a directive that prohibits Russian mutual funds from directly or indirectly investing in crypto assets.

According to the CBR, funds cannot invest in digital currencies or in “financial instruments, the value of which depends on the price of digital currencies”. The proposal issued by the CBR, in line with its hard stance on decentralised digital money, comes after the regulator urged stock exchanges to avoid trading securities tied to cryptocurrencies in July 2021.

Despite its firm stance against cryptos, Russia is currently working on a Ruble-backed central bank digital currency (CBDC). A pilot program was set for launch this month, but the deadline has been moved with a prototype expected to be created in “early 2022”.

Hacking a Cause of Concern for Russia

Hacking has become a hot topic in the crypto world as the incidence continues to rise. Of particular concern is the involvement of Russian-based hackers. In October, Google’s Threat Analysis Group (TAG) spent a good deal of time fending off hackers attacking the accounts of YouTubers to hijack and repurpose them to run ads for crypto scams. TAG had found that the perpetrators of the campaign were recruiting hackers from a “Russian-speaking forum”.

Last month, the US Department of Justice announced charges against a REvil ransomware affiliate responsible for the hack against the Kaseya MSP platform in which ransom demands totalled US$767 million. Law enforcement has also impounded an additional US$6.1 million from another REvil ransomware affiliate, Russian national Yevgeniy Polyanin, who remains at large.

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Banking Bitcoin Crypto News Cryptocurrencies

Bank of England Says BTC ‘May Be Worthless’, But Pound Down 98% Against BTC in 5 Years

The Bank of England (BOE) is well-known for its hawkish stance towards Bitcoin, so it should come as no surprise that its deputy governor, Sir Jon Cunliffe, has now claimed that Bitcoin “could theoretically or practically drop to zero”.

The facts however, suggest otherwise.

Pound Sterling priced in BTC. Source: TradingView

Danger to the Established Financial System

Cunliffe told the BBC that Bitcoin poses a threat to the stability of the financial system. With 2.3 million digital asset owners in the UK and with cryptocurrencies representing just over 0.1 percent of total household net asset value, he recognised that the risk at present was not terribly significant. He remains, however, concerned due to its volatility.

Their price can vary quite considerably and they could theoretically or practically drop to zero … the point, I think, at which one worries is when it becomes integrated into the financial system, when a big price correction could really affect other markets and affect established financial market players.

Sir Jon Cunliffe, deputy governor, Bank of England

The deputy governor also felt that at present the standards and regulations relating to crypto were “not there yet”:

We really need to roll our sleeves up and get on with it, so that by the time this becomes a much bigger issue, we’ve actually got the regulatory framework to contain the risks.

Sir Jon Cunliffe, deputy governor, Bank of England

Inflation More Dangerous?

On the same day as Cunliffe’s comments, in a blogpost published by the BOE the bank offered an unusual criticism of Bitcoin’s scarcity saying “its scarcity may even, ultimately, render Bitcoin worthless”. The mechanics of how that would play out remain somewhat of a mystery.

It went on to say: “Now, so far, Bitcoin has not performed [as] well as money. Quick recap: money issued by central banks, fiat money, acts as a ‘store of value’ – it preserves the spending power of income and wealth, so that you can be confident that a pound, say, will buy about as much in a year’s time as it would today.”

Ironically, the timing of these comments could not have been less opportune as the UK has just recorded its highest inflation in 10 years.

Worse still is the fact that, relative to Bitcoin, the Pound Sterling is down 60.89 percent over the past year and 98.31 percent over the past five years.

Fiat currency performance in BTC. Source: Priceinbitcoin

Despite being largely antagonistic towards crypto, the BOE is in the process of investigating a digital pound, dubbed “Britcoin”.

Fiat Currencies Inherently Inflationary

While potentially offering some benefits, the “Britcoin” is unlikely to overcome the fundamental problem with fiat currencies – that they are inflationary by nature, with unpredictable monetary policy and controlled by central authorities with a proclivity to increasing its supply, which naturally and ultimately leads to debasement.

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Australia Banking Bitcoin Crypto News Cryptocurrencies Dogecoin Ethereum NFTs

Survey Finds Most Australians Still Have No Idea About Crypto or NFTs

Contrary to findings published last week by the Independent Reserve Cryptocurrency Index (IRCI), a new Saxo Markets survey reveals only one in 10 Australians knows what a cryptocurrency is, with those older than 65 even less certain.

There is also a divide between the sexes, according to the Saxo survey. Around 21 percent of Australian men claim to have a handle on what cryptocurrencies are and how they work, compared to just seven percent of women.

These findings stand in stark contrast to the IRCI survey, which found that:

  • 28.8 percent (or almost three in 10) of Australians either own or have owned crypto (up from 18.4 percent in 2020); and
  • the proportion of women who own crypto has almost doubled in 12 months from 10.1 percent in 2020 to 20 percent.

The Saxo poll found that bitcoin was easily the best-known crypto, albeit with an underwhelming 38 percent of Australians surveyed recognising the name. The next most familiar cryptocurrencies were Ethereum, ringing a bell for 12 per cent of Australians surveyed, and Dogecoin next on 8 per cent.

By comparison, the IRCI survey found that nine in 10 Australians were aware of bitcoin with more than one in five owning it. The next-ranked crypto was Ethereum, at 11 percent (up from 5 percent ownership in 2020), on a relative par with the Saxo survey.

Three in Four Australians ‘Unaware’ of NFTs

Perhaps the most surprising Saxo statistic was that 75 per cent of Australians apparently have not even heard of non-fungible tokens (NFTs), though they’ve been by far the hottest blockchain commodity in 2021. Below is a table relating to Saxo’s findings:

As Australian Crypto Owners Push Toward a Million, a CBDC is On the Way

Last week, Australian Federal Treasurer Josh Frydenberg estimated that more than 800,000 Australians have owned cryptocurrency at least once. Crypto was a “fast-moving area” that the government needed to get ahead of, Frydenberg said, while also declaring both the Commonwealth and Reserve banks were planning to introduce a central cryptocurrency.

The Saxo survey found that 42 per cent of Australians would use a cryptocurrency if it were made legal tender tomorrow, but only one in four agreed that cryptos should be declared legal by the government. If cryptos were in legal circulation, one in three Aussies said they would incorporate them in their savings or retirement plans.

In August, the 2021 Global Blockchain Survey conducted by multinational accounting firm Deloitte revealed that 76 percent of respondents believed crypto would be a strong alternative to, or outright replace, fiat money within the next decade.

According to a May survey by TradingView, cryptocurrencies had by then become Australians’ second-most preferred assets, outranking traditional assets such as bonds and futures. Just a month later, another survey by international crypto exchange Kraken found that 40 percent of millennials preferred investing in digital assets over real estate.

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Australia Banking CBDCs Crypto News Regulation

RBA Wholesale CBDC Trial ‘Project Atom’ Heralded a Success

While the Reserve Bank of Australia (RBA) has been investigating central bank digital currencies (CBDCs) for some time, its policy position has not always been clear. However, in a report released this week, there are signs that wholesale CBDCs may indeed be around the corner.

Project Atom Forecasts Efficiency Gains

Project Atom was a collaborative research project undertaken during the past year exploring the potential use and implications of a wholesale CBDC using distributed ledger technology (DLT). The CBDC itself is intended to be used by wholesale market participants (ie, banks and other financial institutions) for the funding, settlement and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform.

According to the RBA, the results of the trial demonstrated that “the digitisation of syndicated loans on a DLT platform could provide efficiency gains and reduce operational risk by replacing highly manual and paper-based processes”.

Other aspects of the trial involved exploring the programmability of CBDCs that “could improve efficiency and reduce risk in transactions”.

Project Atom demonstrated the potential for a wholesale CBDC and asset tokenisation to improve efficiency, risk management and innovation in wholesale financial market transactions. The project also demonstrated the benefits of collaboration in advancing our knowledge in this area. The bank will continue its research on CBDCs as part of its strategic focus area on supporting the evolution of payments.

Michele Bullock, Assistant Governor (Financial System), RBA

Overall, despite noting potential improvements in efficiency, risk management and innovation, the RBA noted that more detailed policy work was required before the introduction of any CBDCs.

Retail CBDCs?

As reported by Crypto News Australia in February of this year, the position then was that there was no strong case for issuing retail CBDCs. And this, more or less, appeared to be the case until mid-November, but as of this week things have seemingly moved in the opposite direction, as noted by ABC business reporter David Taylor:

This shift in direction is not entirely unexpected, as CBDCs naturally confer more powers on those in control. They represent programmable money, a behavioural finance innovation enabling central bankers to use the tools at their disposal to target specific individuals, groups or demographics to drive whatever consumer behaviours they are looking to achieve.

Perhaps this is why Edward Snowden, a known privacy advocate, regards them as a tool for financial surveillance. It’s also a reason why many are turning to Bitcoin, a truly decentralised alternative.

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Banking Crypto News Gemini Regulation

CBA Account Holders May Soon Get Interest on their Crypto

Last month, the Commonwealth Bank of Australia (CBA) became the first in Australia to offer crypto to its customers. Now the country’s largest bank is moving to offer customers the ability to earn interest on their crypto.

CBA Leans on Gemini for Crypto

In addition to partnering with Gemini for its crypto offering, CBA also recently invested in the exchange’s first external fund raise, suggesting that the relationship went a lot deeper than initially suspected.

Now, according to a report by The Australian, CBA and the New York-based crypto services provider are planning to launch a “crypto interest account” to Australian customers whereby they would receive a fixed interest rate for lending their digital assets into the broader market.

Speaking about the Australian market, Andy Meehan, chief compliance officer for Gemini Asia Pacific, suggested that:

We think CBA broke the mould in your market, which is an attractive market – in fact is it a highly developed investment market that has a long tradition of people being very quick to take up new finance technology when it arrives on the scene.

Andy Meehan, chief compliance officer, Gemini Asia Pacific

He went on to say:

CBA has forced the regulators to move much faster than they might have naturally desired, but you’ll see every one of your banks offer crypto services very soon.

Andy Meehan, chief compliance officer, Gemini Asia Pacific

CBA, the First Domino to Fall?

With most Australian banks offering negative real interest rates on savings, investors are becoming increasingly drawn to alternative investments such as crypto.

CBA has been a trailblazer in the space and competitors are no doubt working behind the scenes to catch up. CBA chief executive Matt Comyn recently told Bloomberg that banks needed to be involved in the adoption of technology underpinning crypto and the insatiable demand from customers to trade them. He was also quoted as saying “we [CBA] see risks in participating, but we see bigger risks in not participating”.

It remains to be seen how the regulators will respond to CBA’s crypto interest product. Presumably they will draw guidance from Gemini itself, which as a New York-registered exchange is one of the most heavily regulated entities in the space. If it aligns with Gemini’s offshore product, you’d expect depositors’ crypto to be lent to institutional investors and for the customer to receive different rates for different cryptos, depending largely on the demand and use of such digital assets.

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Banking Bitcoin Crypto News Regulation

SEC Chairman Admits: Bitcoin Competes With the US Banking System

At the Digital Asset Compliance and Market Integrity Summit held in New York on December 1, Securities and Exchange Commission (SEC) chairman Gary Gensler finally admitted that Bitcoin is a competitor to the US banking system and its worldwide consensus.

Regulation at the Heart of Discussion

At the event, Gensler joined former SEC chairman Jay Clayton for a broad discussion of the burgeoning crypto sector. Gensler saw his responsibility as mitigating risks of a “spill in Aisle 3”, which may be caused in his view by a financial instability event, stablecoins, the lending sector, or “by the investing public getting hurt by fraudsters or good-faith actors promoting and raising money”.

Gensler repeatedly referred to the sector as the “Wild West” and argued that “whether it’s a trading platform or token, [they] are not going to evolve well outside of the tenets of public policy”. His main concern articulated related to the asymmetry of information:

At the core of our bargain in the securities markets is: investors get to decide what risks they want to take. But the people raising the money, the issuers, should share full and fair disclosure.

Gary Gensler, SEC chairman

On Bitcoin

In his conversation, Gensler drew a distinction between Bitcoin and digital assets, recognising that in the case of the latter, many projects exhibited securities-like qualities.

Repeating prior comments, he reiterated his position that Bitcoin’s innovation was real in that it was “about money and ledgers” and enabled 24/7 instantaneous, transparent and final settlement. He then went on to describe Bitcoin as an “off-the-grid” alternative to the traditional financial system:

We layered over our digital money system about 40 years ago with money laundering and various sanctions and regimes around the globe; we layered that over a digital currency system called our banking system. In 2008, Satoshi Nakamoto wrote this paper in part as a reaction, an off-the-grid type of approach. It’s not surprising that there’s some competition [Bitcoin] that you and I don’t support but that’s trying to undermine that worldwide consensus.

Gary Gensler, SEC chairman

When Gensler was appointed, Bitcoiners were optimistic as he seemed to appreciate the distinction between bitcoin and altcoins.

However, even if his latest pronouncement is disappointing to Bitcoiners, it’s difficult to argue that Bitcoin isn’t threatening US dollar hegemony. Gensler’s sentiment is also shared by Hillary Clinton, who recently described Bitcoin as “undermining the dollar“.

Shifting towards a “Bitcoin Standard”, like El Salvador, is what broadcaster Max Keiser has termed a “speculative attack against the US dollar”.

So far it seems to be working. And perhaps for that reason, Gensler’s concerns are well-founded.

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Banking Bitcoin Crypto News Markets

Bitcoin Slides After Hitting All-Time High in Turkey Amid Currency Crisis

Turkey is in the grip of a crippling currency crisis as the Turkish lira continues its freefall. The sell-off was sparked after President Recep Tayyip Erdoğan demanded the Central Bank of Turkey cut rates for a third consecutive month from 19 percent to 15 percent.

Shortly after, Bitcoin printed a fresh all-time high against the weakened lira, suggesting that perhaps, Bitcoin fixes this.

The Turkish lira has lost a third of its value in November. Source: Bloomberg

What is Happening in Turkey?

The Turkish lira has been steadily weakening against the US dollar for the past decade, but this week saw the currency collapse over 15 percent in a single day, a historic event for any G20 country.

In a historic event for a G20 country, the Turkish lira is in free fall and making the case for a bitcoin hedge.
Turkish lira/USD exchange rate. Source: TradingView

To make economic matters worse, Turkey’s Consumer Price Index (CPI) has been accelerating over the past two years and is now just under 20 percent.

In a historic event for a G20 country, the Turkish lira is in free fall and making the case for a bitcoin hedge.
Turkey’s CPI. Source: FRED

With growing inflation, reducing real rates and limited USD foreign exchange reserves, the picture is looking bleak for ordinary Turkish citizens. To make matters worse, US$13 billion in debt is set to expire this month and next.

In a historic event for a G20 country, the Turkish lira is in free fall and making the case for a bitcoin hedge.
Source: Bloomberg

Typically, during periods of high inflation, central banks will look to raise interest rates. However, Erdogan, who has fired three central bank chiefs in two years, has pushed for lower interest rates to increase economic growth and exports as well as decrease unemployment.

Yet it is the Turkish citizen who faces a severe decline of purchasing power at an unprecedented rate during a period of soaring prices and political instability.

A former Turkish central bank deputy governor, Semih Tumen, has criticised the policy for annihilating the purchasing power of ordinary Turks, describing the move as an “irrational experiment, which has no chance of success”.

Bitcoin Responds

Following the currency sell-off, Bitcoin did its thing, soaring against the Turkish lira to reach an all-time high of ₺735,432/BTC.

Turkish lira/BTC. Source: TradingView

On November 26, as news of a new Covid-19 variant spooked markets, Bitcoin retreated by 7 percent, however in Turkey it remains up 70 percent over three months and 220 percent year-to-date.

Bitcoin has been viewed as an inflation hedge and this crisis in Turkey is no doubt an opportunity for it to shine. Earlier this year, Bitcoin rose as the Argentine peso collapsed, with the current CPI in the South American nation sitting at over 50 percent. And it’s not just developing nations experiencing inflationary periods – just two weeks ago, Bitcoin catapulted on news of the US’ highest CPI print in over 30 years.

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Australia Banking Crime Crypto News Regulation

CBA’s Crypto Team to Help Track Down Money Launderers

Despite ongoing sentiment in traditional finance circles that crypto is the “Wild West”, Chainalysis, which recently partnered with Commonwealth Bank of Australia (CBA), has assured Australia’s biggest bank that it truly isn’t so.

The Crypto Wild West. Source: Zen Monk

Crypto Forensics On the Case

Chainalysis, which works extensively with the FBI and IRS in the US, has proprietary on-chain forensic analysis techniques that help identify criminal and money-laundering activities on public blockchains.

Speaking to ongoing discussions with local Australian authorities, Chainalysis’ Australia and New Zealand manager Todd Lenfield noted that a lot of its work centred on education.

We want to have conversations with AUSTRAC about what are they looking to regulate and explain to the tax office the lessons that can be learned from what the IRS is doing. We can take experience we have got in the space, and provide a local flavour.

Todd Lenfield, Chainalysis’ country manager in Australia and NZ

Shift in Sentiment in Australia?

In recent months, there have been positive signs that Australia may be gradually shifting towards a more crypto-friendly environment.

Earlier this month, CBA became the first Australian bank to offer its customers the ability to buy cryptocurrencies natively through its digital app. And just this week at the Australian Financial Review Super & Wealth Summit, Liberal Senator Jane Hume cautioned industry against being left behind.

Don’t be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Don’t be the person who was still doing their financial models by hand in 2001, rather than using Excel. Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad.

Senator Jane Hume

Despite these positive signs, the Reserve Bank of Australia (RBA) remains concerned about the risks of crypto, in particular memecoins. Over the past year, crypto has seemingly crossed the chasm into mainstream consciousness. This in turn appears to have pushed regulators towards embracing innovation and regulating it, rather than trying to undermine or shut it down.

While some regulatory risks remain, the crypto space within Australia is arguably looking brighter than ever.

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Banking Bitcoin Crypto News Investing New Zealand Superannuation

$75 Billion Aussie Super Fund Hostplus: ‘Crypto is Too Big to Ignore’

One of Australia’s largest institutional investors believes that cryptocurrency as an investment is the economic elephant in the room, with the likelihood of super funds holding digital assets inevitable in time.

Hostplus has over A$2.2 billion committed to the venture capital sector, of which A$1.5 billion has already been invested. The industry super fund’s chief investment officer, Sam Sicilia, says it is no longer possible to dismiss the booming crypto market simply because of regulatory headwinds.

Sam Sicilia, chief investment officer, Hostplus. Source: ioandc.com

“Hostplus does not have crypto investments, but I do see the day where it becomes mainstream for institutional super funds,” Sicilia told The Australian newspaper. “It’s not just about a return for us. We need a governance structure, we need safekeeping of the assets, and there are regulatory requirements.”

Much Work Still to Do for Super Funds

Super funds needed to do a lot more groundwork before they were “crypto-ready”, Sicilia adds, and regulatory challenges had to be met ahead of any such move.

Last month, the Bank of America released a research paper on crypto with a similar outlook as institutional investors around the globe consider crypto’s prospects.

“With a US$2 trillion-plus market value and more than 200 million users, the digital asset universe is too large to ignore,” according to Bank of America analysts Alkesh Shah and Andrew Moss.

Both Shah and Moss predict that crypto-based digital assets could form an entirely new asset class.

It’s difficult to overstate how transformative blockchain technology, digital assets and the thousands of decentralised apps that have yet to be created could potentially be.

Alkesh Shah and Andrew Moss, crypto and digital assets strategy analysts, Bank of America

Earlier this month, the Reserve Bank of Australia red-flagged the “fervour” and “speculative demand” for crypto, warning of the potential for a severe price decline.

That said, Hostplus’s Sicilia foresees that bitcoin’s volatility would open up buying opportunities well below its current US$57,500 price (at the time of writing).

“I think we can get 10 per cent or more out of equity markets each year until people have a choice to put their money somewhere else. And that could be a long time from now,” says Sicilia, who oversees A$75 billion in assets under management at Hostplus.

‘Where Else Will People Be Putting Their Money?’

“People will keep putting their money into equity markets to get dividends. That’s the driving force powering markets. And there will be volatility, of course, but so be it. Where else are they going to put their money?”

Two months ago, Australian superannuation funds were being urged to consider exposure to crypto assets or risk being left behind. In July, New Zealand-based pension fund Kiwi Saver revealed it had invested in bitcoin in October last year. While its chief investment officer said at the time that most super funds in Australia would follow suit within five years, the reality is that Aussie super funds remain too slow out of the blocks.

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Australia Banking CBDCs Crypto News Cryptocurrencies Regulation Stablecoins

Outgoing RBA Policymaker Thinks CBDCs and Global Regulation Will Undermine Crypto

Dr Tony Richards, the soon-to-retire head of payments policy at the Reserve Bank of Australia (RBA), has warned local investors they should be wary of speculating on digital currencies as regulation and CBDC development could threaten the crypto market.

Richards stated in his November 18 speech to the Australian Corporate Treasury Association that one of the topics that “generated the most discussion, conversation and debate in the nearly 10 years” of his time at the RBA was “the emergence of distributed ledger technology, cryptocurrencies and stablecoins, and the prospective emergence of central bank digital currencies”.

Dr Tony Richards, RBA’s outgoing head of payments policy.

The Same Ol’ Strawmen

Richards warned of excessive hype around crypto, citing instances like Dogecoin “that was started as a joke in late 2013 [and] had an implied market capitalisation as high as US$88 billion in June this year”, fuelled mainly by “influencers and celebrity tweets”. The RBA has previously also discussed the risk of meme coins and DeFi in monetary policy meetings.

The RBA has signalled that if a regulatory crackdown should occur, thousands of private currencies that have emerged on the back of the soaring bitcoin price would become unnecessary. It has also targeted Proof-of-Work’s energy consumption and how crypto facilitates financial crimes and illegal activities such as ransom demands.

Additionally, after COP26, Richards warned: “The very high use of energy involved in mining proof-of-work cryptocurrencies could attract greater attention from governments and policymakers.” The combined energy use for the Bitcoin and Ethereum networks was estimated to be similar to that of the world’s 13th-largest economy, he said.

However, Jon Deane, chief executive officer of Trovio, a digital asset infrastructure adviser and asset manager, disputed Richards’ comments on crypto’s environmental impact, saying that 57 percent of bitcoin mining uses renewable energy sources.

Regulation Could Reduce Crypto to “Only Niche Use Cases”

“If there were to be global policy action to deal with some particular concerns about the use of cryptocurrencies, plus the arrival of new stablecoins and CBDCs, that could safely meet the needs of a wide range of users, existing cryptocurrencies might then have only niche use cases, at best,” Richards said, adding that “much of the official sector globally remains sceptical of developments in the cryptocurrency market”.

Reaction from the crypto community was swift and predictable:

Steve Vallas, chief executive of Blockchain Australia, retorted that “it continues to be our experience that hawkish views about cryptocurrency are driven by entrenched narratives around bad actors and financial crime, narratives that are not supported by the data”.

Could CBDCs Undermine the Use of Crypto?

Richards is of the opinion that the rise of crypto is not yet an issue threatening financial stability, but the RBA expects global central banks to move to assert control over digital finance and respond to the growth of bitcoin and other coins by issuing CBDCs.

He believes CBDCs “would be denominated in fiat currencies, be safer than existing stablecoins, and would likely have faster, safer and more efficient transaction verification mechanisms than most cryptocurrencies”, and would likely be “viewed as superior instruments for the settlement of transactions in tokenised assets on distributed ledgers”.

But according to Deane, “People buy bitcoin to move away from the devaluation of fiat currencies by central banks to a finite resource that acts as both a store of value and ultimate settlement layer”.

Dr Richards concluded that banks would continue to work with the private sector and international counterparts to ensure they stay abreast of innovations in the payments system, with the RBA even hiring CBDC researchers. There is significant work still to be done with the other financial regulators and the parliament to ensure that Australia has a fit-for-purpose regulatory framework for digital assets.