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The Adoption of Bitcoin May See Considerable Increase if the Proposed Cash Ban in Australia Activates

Under the new bill being considered by the Australian Parliament, people could be jailed for two years and pay a fine of $ 25,200 for just using more than $10,000. If this bill is passed, it will force its citizens to look away from traditional fiat currencies and go for decentralized digital currencies such as Bitcoin.

According to the Reserve bank, the intention of the federal government towards this $10,000 cash limit was to fight against the “black economy” and not to eliminate the use of cash. There have been a lot of reactions from the Bitcoin proponents and the economists about this recent development, with the primary concern being the control and power this will give to the banks.

According to Matthew Lesh of Australia’s Institute of Public Affairs, this proposed bill on the restriction of the use of cash is a “disturbing breach of our right to privacy” and “an attack on the basic liberty of free exchange.” Matthew likened this to George Orwell’s classic novel, 1984, describing how Big Brother uses surveillance to take control over the lives of its citizens.

“The cash ban intends to create an accessible digital record of transactions that the government can monitor,” Lesh said. “This establishes a creepy precedent, foreshadowing a future in which you are only allowed to make purchases that Big Brother can watch.”

According to the Citizens Electoral Council of Australia (CEC), trying to hide under cover of fighting against the black economy is a “shameless lie” as the according to the International Monetary Fund (IMF) has noted that Australia isn’t under any imminent threat of a black economy problem. This became the result of the fact that the country has the tenth smallest black economy in the world. The record also reflects that the size of the Australian black economy had almost halved between 1991 and 2015.

The criticisms coming from numerous directions about this bill clearly shows the shortcomings of the traditional financial system. However, there is a considerable possibility of Australians ditching the banks and opting for the use of Bitcoin; this possibility of a vast flow of new users is undoubtedly good news to the cryptocurrency market.

Image via Shutterstock

Reserve Bank Of New Zealand Wants to Preserve Cash, Monitors CBDC Developments

The Reserve Bank of New Zealand—Te Pūtea Matua—seeks to preserve the benefits of cash for its citizens, while paying close attention to the future of money and central bank digital currency (CBDC) development.

The Reserve Bank of New Zealand, (Te Pūtea Matua) seeks “to preserve the benefits of cash for all who need them” for financial inclusion in the economy, while the central bank is also keeping an eye on CBDC developments and the changing nature of money.

Assistant Governor of the Reserve Bank, Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference today Oct. 19:

“Cash is being used less as a means of payment and access to cash is declining. However, cash provides important benefits to many people, including legal tender money, social and financial inclusion, peer-to-peer payments, backup payments, and privacy and autonomy.”

The Reserve Bank is encouraging banking sector participants to consider supporting citizens who depend on cash for everyday needs.

Governor Hawkesby revealed that the Reserve Bank of New Zealand is building new policy and governance capabilities to support its strategy, as well as to prepare for the future of money. He said, “In the years ahead, some of the biggest questions facing central banks could well be around the future of money itself.”

The Future of Cash and CBDC

The Reserve Bank’s immediate priority is to support the banking and service industries to ensure that cash systems continue to be fit for purpose. Initiatives include reshaping vaulting arrangements, banknote standards, and building towards a sustainable future. Hawkesby highlighted that ultimately, a more transformational solution might be needed.

Governor Hawkesby said:

“Looking forward, we remain open-minded about how the technology of money and payments will continue to evolve.”

The Reserve Bank Governor highlighted the future of cash as being created by the central banks around the world— who are competing to be the first to release their central bank digital currencies (CBDC). China has been the frontrunner, aggressively piloting its own DCEP (Digital Yuan) and the most powerful central banks including the Federal Reserve and the European Central Bank collaborating on research to assess the positives and negatives of CBDC implementation.

While the New Zealand central bank is also researching retail central digital bank currencies, Governor Hawkesby said, “Although we have no imminent plans to issue a CBDC, we are well-connected and considering these developments very closely.”

Reserve Bank of Australia Also Hesitant on CBDC

CBDC development in neighboring Australia also appears off to a slow start with reports in late August that the Payments System Board of the Reserve Bank of Australia (RBA) had found no strong public policy-case to issue a central bank digital currency (CBDC) despite the trend of declining cash-use throughout the COVID-19 pandemic.

However, the latest reports from the RBA’s Head of Payments Tony Richards have revealed that Australia’s central bank may not have entirely given up on the quest to pursue CBDC issuance.

Richards said that due to the bank’s mandate to promote efficiency in the payment system, it will give up on the topic of a potential CBDC rollout. The RBA head executive noted:

“Consistent with the Bank’s mandate to promote competition and efficiency in the payments system and contribute to the stability of the financial system, we will be continuing to consider the case for a CBDC, including how it might be designed, the potential benefits and policy implications, and the conditions in which significant demand for a CBDC might emerge.”

Reserve Bank of Australia Will Explore Wholesale CBDC with ConsenSys Ethereum POC

The Reserve Bank of Australia has announced a partnership with leading Australian banks and enterprise-Ethereum blockchain firm ConsenSys, to explore the implications of wholesale CBDC and distributed ledger technology (DLT).

Despite reports as recently as September, that the Reserve Bank of Australia (RBA) has not seen a strong public policy use case for a central bank digital currency (CDBC), Australia’s central bank is continuing to research and explore the potential of the technology in its new partnership.

According to the announcement on Nov 02, the Reserve Bank is partnering with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software, a blockchain technology company, on a collaborative project to explore the potential use and implications of a wholesale form of central bank digital currency (CBDC) using distributed ledger technology (DLT). This is part of ongoing research at the Reserve Bank on wholesale CBDC.

Michele Bullock, Assistant Governor (Financial System) of the RBA said:

“With this project, we are aiming to explore the implications of a CBDC for efficiency, risk management, and innovation in wholesale financial market transactions. While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”

The project will involve the development of a proof-of-concept (POC) for the issuance of a tokenized form of CBDC that can be used by wholesale market participants for the funding, settlement, and repayment of a tokenized syndicated loan on an Ethereum-based DLT platform. The POC will be used to explore the implications of ‘atomic’ delivery-versus-payment settlement on a DLT platform as well as other potential programmability and automation features of tokenized CBDC and financial assets.

The project is expected to be completed around the end of 2020 and the parties intend to publish a report on the project and its main findings during the first half of 2021.

E-AUD, Digital Yuan and CBDC

The new partnership marks a shifting attitude towards the necessity of a central bank digital currency by Australia’s central bank.

According to RBA release on Aug 21, the central bank argued that Australian payments systems operators and retail payments have proven resilient throughout the COVID-19 pandemic disruption to the economy as have financial markets infrastructures—as such it deemed that there was no a strong public policy use case for a central bank digital currency.

Meanwhile, China and the United States are still in the development of their own world-changing digital currencies. China is the clear front runner and is expected to have rolled out its Digital Yuan by 2022, while the United States is not concerned with speed but rather with getting the Digital Dollar correct. While the economic superpowers race each other, the small archipelago of the Bahamas has already rolled out their own CBDC, the Sand dollar. The digital currency is available to all residents but will obviously not have the far-reaching implications of the coming launch of the Digital Dollar and China’s DCEP.

National Australia Bank to Launch Ethereum-Based Stablecoin

National Australia Bank (NAB), one of Australia’s “Big 4” banks, is getting ready to launch an Australian dollar-pegged stablecoin on the Ethereum network. This coin will be backed by the Australian dollar. This coin will have the value of one Australian dollar attached to it. This coin will have a value equivalent to one Australian dollar affixed to it when it is released. When it is first put into circulation, this coin will have a value ascribed to it that is comparable to one Australian dollar. When it is initially placed into circulation, this coin will have a value that is roughly equivalent to one Australian dollar. This value will be assigned to it before it is put into circulation. This coin will first be put into circulation with a value that is approximately comparable to one Australian dollar. This value will be determined when the coin is originally put into circulation. Before being sent into circulation, it will get a value equivalent to this one first. If anything similar were to occur, the National Australia Bank (NAB), which is one of the “Big 4” banks in Australia, would be the second of the country’s financial institutions to be touched by it. NAB is a member of the Reserve Bank of Australia.

In a story that was published on the 18th of January by the Australian Financial Review, the subject of the introduction of the AUDN stablecoin was examined. The piece was composed using the English language throughout. According to the conclusions of the research, it is projected that the launch of the AUDN stablecoin would take place somewhere in the neighbourhood of the middle of the year 2023. The current situation has been brought to the attention of a greater number of members of the general public. The easing of the transfer of funds across international borders is the primary objective of this firm; the ease of the purchasing and selling of carbon credits follows in a close second (AFR).

Billionaire investor Ray Dalio has described fiat currency as being in serious jeopardy

Ray Dalio, a billionaire investor, has said that fiat money is under “jeopardy” as an effective store of wealth, but he does not think that Bitcoin (BTC) and stablecoins will be the answer to the problem.

On February 2, the founder of the hedge fund firm Bridgewater Associates appeared on CNBC’s Squawk Box to discuss his concerns regarding the “effective money” status of the United States dollar and other reserve currencies as a result of the massive amount of money that has been printed using these currencies.

“We live in a world where the form of money that we are used to is under peril. We are creating too much money, and it’s not just the United States doing it; it’s all of the reserve currencies.”

Nevertheless, Dalio was quick to add his opinion on whether Bitcoin was a viable answer to the problem, noting that despite everything it has done in “12 years,” it is still too unpredictable to function as money:

“This is not going to be a productive use of money. It does not function very well as a means of storing riches. “He claimed that it is not a viable medium of trade since it is not efficient.

Stablecoins, which are replicas of state-backed fiat currency, were another kind of cryptocurrency that he thought was ineffective as a form of money.

Instead, Dalio recommended the introduction of a “inflation-linked currency,” which would help customers preserve their purchasing power in the face of rising prices.

“The item that comes the closest to that is something called an inflation index bond,” he said. “However, if you developed a coin that says OK, this is purchasing power that I know I can save in and put my money in over a period of time and trade in everywhere, I believe that would be a terrific coin.”

“Therefore, I believe that you are going to witness the creation of currencies that you have not seen before and that most likely will end up becoming coins that are both beautiful and viable. He continued by saying, “I don’t believe Bitcoin is the answer.”

On the other hand, Dalio’s assessment of Bitcoin and the practicality of an inflation-linked currency did not get widespread support from the financial community.