Multiple banks are actively contemplating the idea of creating their own digital currencies. Surprisingly enough, Australia is one of the places where such efforts may take off sooner rather than later. A digital dollar makes some sense to the Australian fintech sector, although it remains to be seen if this venture will be officially pursued in the end.
Australian Fintech Startups Unveil Bold Plan
In most cases, one would expect a country’s central bank to unveil plans for a national digital currency. After all, that is how these proposals have arisen in the US, the UK, and Russia. However, Australia is a very different place in every possible way when it comes to national digital currencies. This proposal was not made by the Reserve Bank of Australia, but by local fintech startups instead. This is a rather surprising turn of events, although it doesn’t necessarily mean the idea will be carried out.
One can make the argument that Australia will benefit from a national digital currency. Considering the country’s Reserve Bank has not shown any interest in this concept so far, it remains highly doubtful it would be willing to take the plunge anytime soon. Then again, the fintech startups drafting this proposal have introduced some compelling arguments in favor of their digital dollar. A few different use cases were presented as well, as it would be a competitor to both Bitcoin and Ethereum.
Moreover, Australia is one of those places where blockchain technology really seems to thrive. It is unfortunate that these startups feel the need to use decentralized technology to create a 100% centralized form of money, though. Then again, it is good to see this proposal incorporate blockchain technology in the way that it does. For all we know, they could have proposed the use of a mutable SQL database as well.
Although this proposal has been formally presented, it remains to be seen if the Reserve Bank of Australia will decide to pursue it. Moreover, the country’s treasury has not indicated any desire to issue a digital Australian dollar anytime soon either. These fintech startups argue that such a national digital currency could build trust and usage of public cryptocurrencies as well, even though they want their creation to directly compete with the likes of Bitcoin.
All of this goes to show central bank digital currencies are slowly starting to gain support. Japan, too, is currently exploring a similar entity, known as J-Coin. All of these projects are still in the proof of concept stage, as no bank or institution has even begun creating their own digital currency right now. That doesn’t mean it won’t happen in the future, though, but for now, these are mainly ideas more than anything else.
It is worth mentioning that one of the startups floating this idea is already using its own digital representation of the Australian dollar. This is not a currency officially backed by the country’s reserve bank, mind you, which is why the company is in favor of seeing a trust-based national currency. If the government were to endorse such a currency, things would get very interesting for Australia, to say the very least.