Digital cash not on RBA agenda

The Reserve Bank has poured cold water on the idea of a digital Australian dollar, with head of payments policy Tony Richards declaring the demand isn’t there.

A group of Australian fintech start-ups through industry body FinTech Australia last year wrote a letter to the RBA calling for a new digital currency, known as the ‘DAD’ or Digital Australian Dollar.

“A centrally issued Digital Australian Dollar, backed by fiat [physical] currency, would enable payments to be made between participants in real time and 24/7 along the supply chain,” AgriDigital co-founder Emma Weston said last year.

Meanwhile Othera CEO John Pellew said in the letter a ‘DAD’ would help his company keep an automated record of payments and full audit trail.

“Currently to make our technology work we are forced to integrate back into the legacy payment rails of the banking system in order to facilitate and process repayments from borrowers and then forward payments on to the token holders,” he said.

“This is a slow and expensive process and does not utilise the built-in capability of the blockchain smart contracts to auto process these repayments … A DAD would unlock the full potential of our blockchain and smart contract technology.”

Proponents say a ‘DAD’ could remove middlemen from the system and allow for a cheaper electronic currency, while allowing for faster transaction settlement times and for the government to fully regulate the ecosystem.

In a speech at the Australian Business Economists Briefing on Tuesday, however, Mr Richards suggested there was little demand for a ‘DAD’, as it relates to households for their everyday payments.

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Source: Digital cash not on RBA agenda – The Australian