The head of the Australian central bank, Philip Lowe, stated on July 17 that regulated consumer-focused digital tokens produced by private companies may be preferable to those issued by central banks.
In spite of their continued mistrust of decentralised digital assets, monetary authorities throughout the world are attempting to implement Central Bank Digital Currency (CBDC). This is why Lowe made his comments. During a panel discussion that was live streamed online during the G20 finance officials' conference in Indonesia, the Governor of the Australian Central Bank made some remarks.
According to Lowe, "if these tokens are going to (be) widely utilised by the community), they will need to be backed by the state or controlled much like we regulate bank deposits." He was talking about stablecoins, which have been criticised recently as a result of the May collapse of one stablecoin, TerraUSD, and its linked counterpart Luna.
When asked why he thought privately issued digital tokens would be preferable, Lowe responded, "I tend to think that the private solution is going to be better - if we can get the regulatory arrangements right - because the private sector is better than the central bank at coming up with new ideas and designing features for these tokens, and there are also likely to be very high costs for the central bank setting up a digital token system."
Eddie Yue, chief of the Hong Kong Monetary Authority (HKMA), stated during the conference that more examination of stablecoins might help lower risks from DeFi, which intends to utilise computer code to do away with the need for financial intermediaries in lending, investing, and other financial activities.
The head of the Australian Central Bank has previously shown interest in consumer or privately held digital currencies. The Governor expressed support for a retail version of digital currency in late 2021, saying that tokens may be more freely circulating in the economy than traditional dollars. The Reserve Bank of Australia is leery of supporting cryptocurrencies due to their erratic character, like the majority of central banks.
Lowe stated in 2021 that he was "sceptical that we will move in this way [of cryptocurrencies for general purpose payments]" while outlining three potential retail forms of a CBDC.
In nations all across the world, CBDCs are becoming more popular. As a replacement for the nation's cash economy, the Bank of Jamaica (BoJ) recently approved adopting CBDC-JAM-DEX. The introduction of the Digital Rupee—the CBDC in India—will take place anytime between 2022 and 2023, according to earlier statements made by Nirmala Sitharaman, India's Union Minister of Finance.
