Australian Regulators On Development Of Stablecoin Framework
Monday, January 30, 2023
HomeAltcoinsAustralian Regulators Places High Focus On Development Of Stablecoin Framework

Australian Regulators Places High Focus On Development Of Stablecoin Framework

On December 8th, a report on stablecoins was released on the official website of the Reserve Bank of Australia. The report assessed the recent developments, risks, and regulatory prospects of stablecoins.

The report says that “stablecoins have the potential to improve the efficiency and functioning of a variety of payment and other financial services.” Even though the report spends a lot of time talking about risks, it has a pretty positive tone.

According to the report, the authorities in charge of regulating the financial system in Australia are “engaging in extensive effort” to determine how stablecoins may be included into the national payment ecosystem without putting it at an undue risk. The authors identify repercussions connected to energy and climate change, disruptions to financing markets, increased bank exposure, and liquidity hazards as some examples of these types of threats.

The authors underlined the unique vulnerability of algorithmic stablecoins by using the collapse of Terra as an example. The authors explained that the stability of algorithmic stablecoins rests on investors’ faith in the value of an unbacked crypto asset.

Local Senator Andrew Bragg circulated a proposed piece of legislation in September under the working title Digital Assets (Market Regulation) Bill. The paper suggests the establishment of licences for digital asset exchanges, digital asset custody services, and stablecoin issuers in order to regulate the digital asset industry.

Recently, the Assistant Governor of the Reserve Bank of Australia, Brad Jones, revealed the information that the Reserve Bank of Australia’s central bank digital currency (CBDC) pilot programme in Australia has received more than 140 use case submissions from the financial sector. However, the official in charge of monetary policy at the central bank cautions that the current interest in CBDC has the potential to displace the Australian dollar and cause individuals to completely forsake commercial institutions.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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