Bitcoin Not Threatening, Has 'Limited Use' In Australia

The Reserve Bank of Australia does not believe Bitcoin is a threat to Australia. The central bank told a Senate inquiry that the use of digital currencies like Bitcoin is limited in the country.

The RBA said it would be unlikely that any benefits of regulation would outweigh the possible costs. Australia’s central bank was represented in the inquiry by the head of payments policy Tony Richards and senior manager David Emery.

Richards said in an opening statement that the use of digital currencies do not yet present any issues for the bank in terms of its monetary policy and financial stability. He added that digital currencies are not yet considered legal tender. “There is nothing to prevent two parties agreeing to settle a payment using a digital currency,” remarked Richards.

However, AAP reports that the RBA believes digital currencies like Bitcoin are taking hold in international transactions. The Senate inquiry was told that there were concerns over matters relating to taxation, consumer protection, anti-money laundering and counter-terrorism financing rules, the RBA said there are still areas outside its realm of expertise.

Richards said if the RBA decided it is necessary to impose regulations in the digital currency payments system, the international character of such systems would be limited to act unilaterally. This would mean that any action would need to be coordinated across international boundaries.

The Australian senate has also heard the statements of representatives from the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). ASIC and ACCC both suggested that Australian banks are becoming wary of Bitcoin-associated customers. ASIC said in its statement that it was aware of the increasing number of banks taking precautions in dealing with businesses involved in Bitcoin transactions.

Meanwhile, organisations that deal with Bitcoin around the world are being scrutinised after the collapse of Mt. Gox, the world’s biggest Bitcoin exchange, and the breach of digital currency exchange post Cryptoine. The global Bitcoin market continues to recover from a steep decline of the digital currency’s value in January, reports ZDNet. The volatility of Bitcoin as a currency is being questioned as its valuation had once plunged from $224 (AU$290) to $175 within a matter of hours.

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