RBA CBDC Offers Compelling Crypto Stability - NAB
(9 November 2021 – Australia) An official Reserve Bank of Australia (RBA) central bank-issued digital currency (CBDC) would markedly reduce the risk of excessive leverage and under-collateralisation in digital assets markets which could exacerbate the next financial crisis according to NAB.
NAB’s Head of Digital Innovation and Sustainability, Lisa Wade, has called on the Australian government and RBA to issue an “eAUD” to ensure digital currencies such as Bitcoin do not inflict wide scale destabilisation of increasingly interconnected financial markets in the event of a crisis. The RBA is in the final stages of “Project Atom” which investigates a proof of concept (POC) for a wholesale CBDC. NAB and CBA have both contributed to the initiative while a recent Senate select committee report called on Treasury to lead a policy review on a retail CBDC for Australia.
“Regulation of the space is critical. Having a really solid CBDC and global infrastructure is really important, so large transactions can happen, and we can get to institutional quality because the functionality and programmability of digital money is so incredible for de-risking assets and investments. It could get really ugly quickly, and no-one wants that to happen. Crypto is a complex subject, but bankers need to speak more publicly about the topic to ensure Australia develops a sophisticated regime for managing risks” Ms Wade commented.
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