Reserve Bank says ‘not now’ to digital currency

 

The Reserve Bank won’t be issuing an official digital currency any time soon.

In a speech, Deputy Governor Geoff Bascand says: “Currently, it is still too early to determine whether a digital currency should be issued.”

There were “considerable risks” for a digital currency to undermine financial stability, he says.

“A digital currency is easier and faster to distribute around the country than banknotes because it doesn’t need to be transported,” he says.

A downside of a digital currency would be new infrastructure costs, he says.

On whether a digital currency could improve payment systems, Bascand says it depends on how the currency is designed.

“Digital currencies with central control can improve efficiency, but potentially at the expense of reduced resilience. At this time, a blockchain-type of official digital currency would reduce the efficiency of the payments system.”

First published 3 July, 2018

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.


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