RBA says Bitcoin won’t take off in Australia


RBA says Bitcoin won’t take off in Australia

The rise and rise (and fall and rise and fall) of Bitcoin has been making headlines around the world since it kicked off 9 years ago. Now, the Reserve Bank of Australia has announced it’s unlikely to gain a foothold in Australia.

Here’s what you need to know.

What is Bitcoin?

According to CNN.com, someone under the alias of Satoshi Nakamoto, created the digital currency in 2009. 

Bitcoin is a form of crypto currency. There are other kinds in existence, although Bitcoin is the most widely known. 

No banks are used to buy or sell items using Bitcoin, which means there are no fees, regulations or tracking. (This is also why Bitcoin is popular amongst people trading illicit goods and services.)

Bitcoin is not tied to a particular country, which means it can easily be used between people transacting all over the world.

Bitcoin is purchased in digital marketplaces known as ‘Bitcoin exchanges’ and stored in a ‘digital wallet’. They can be purchased using different forms of currency.

In 2014, Bitcoin fell in value from $1,350 AUD to $337 AUD. From December 2017 to June 2018, it fell 70%, from $26,986 AUD to $8,433.

For more background on Bitcoin, head to our blog here.

What did the RBA say?

Dr Tony Richards, the head of payments policy at the RBA, recently said the stability of the dollar makes it unlikely that Bitcoin would be adopted widely in Australia.

While other countries, including Sweden, are thinking about issuing digital dollars themselves, Richards believes this is not likely to be successful in Australia.

Richards owns a small portion of Bitcoin himself, and admits that while currencies beyond the control of conventional institutions do have real applications, they probably don’t in Australia.

Richards spoke at an event in Sydney for Australian Business Economists.

“When a country doesn’t have a credible currency, then people might look for other ones,” he said.

“Whether those are crypto currencies or something like the US dollar is another issue, but we in Australia have a perfectly credible currency called the Australian dollar; we’ve had low and stable inflation for at least 25 years; and the likelihood that we’d have significant adoption of an alternative currency seems to be pretty low.”

Despite Richards’ doubt over Australia taking up it’s own form of digital currency, he did praise the overall design of crypto currency.

What do you think?

Like any speculative investment, Bitcoin is a subject of intense debate. If you have opinions on whether an Australian crypto currency would do well here, we’d love to hear from you.

Share your views in the comments section below or on our Facebook page.

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Discover more about Bitcoin here, including whether you can buy a house in Australia with it.

 

Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.

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