Going against the tide of crypto adoption, Australia’s central bank published a comprehensive report aimed at glorifying their domestic fiat against Bitcoin. The primary argument made by the Reserve Bank of Australia (RBA) was related to the network speeds, scalability and mining costs of Bitcoin, although the ultimate focus was on flaunting Australia’s fiat network’s current performance.
On the quest to find the feasibility of large scale Bitcoin adoption, RBA hinted that BTC’s existential limitations are the primary reason for the rise of the altcoin universe. In a similar context, the report also described stablecoins as instruments that are designed only to minimize price volatility against strong fiat currency or gold. While stressing on the need to ensure the crypto’s backing, RBA reported,
“The existence of a central entity that controls the asset backing the stablecoin runs somewhat counter to the original idea behind cryptocurrencies, which was to be a decentralised form of money not reliant on any central body.”
As an example, RBA mentioned the prominent asset-backed Tether’s involvement in misleading the users by backing only 74% of its token offerings. The company also took notice of Facebook’s ambitious global cryptocurrency goal, which according to RBA, will also witness fluctuation in value as it is not pegged to any specific fiat or digital asset.
However, the graph clearly displays the NuBits, an algorithmic stablecoins’ performance took a nose dive. Previous attempts of launching stablecoins with initiatives such as TrueAUD and AUDRamp have also failed to make a mark on the Australian market.
Highlighting the failures of numerous cryptocurrencies in terms of market adoption, RBA stated,
“The additional functionality offered by smart contracts does not, in itself, address the fundamental barriers – such as scalability and volatility – to cryptocurrencies becoming widely used for payments.”
In addition to clarifying that no cryptocurrencies currently functions as money in Australia, the central bank mentioned that the ongoing developments that aim to solve the aforementioned problems may eventually funnel down into the centralization of the system. Showing no signs of waiting for crypto to evolve, RBA also stated its vested interest in continuing its innovation drive in traditional centralized payment systems as long as the Australian dollar continued to provide a reliable, low-inflation store of value.
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