Privately Issued Stablecoin Better Than CBDC: Bank of Australia Governor

Stablecoin issued by private companies could be much better than central bank-issued digital currency (CBDC), assuming the companies are regulated appropriately, the governor of the central bank of Australia said on Sunday. Philip Lowe Favors Privately-Issued Regulated Crypto Speaking on Sunday at a seminar on the sidelines of the G20 finance ministers and central bank governors meeting in Bali, Phillip Lowe, the governor of the Reserve Bank of Australia was reluctant to use the words “cryptocurrency” or “assets” as, according to him, it did not have any currency characteristics. Lowe believes that there are various challenges associated with private money, and retailers would always prefer state-backed currencies. However, he also thinks that the private sector is more likely to develop a successful stablecoin linked to official currencies than government bodies unless there are regulations involved. “If these tokens are going to used widely by the community they are going to need to be backed by the state, or regulated just as we regulate bank deposits,” said Lowe. “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 innovating and designing features for these tokens, and there are also likely to be very significant costs for the central bank setting up a digital token system,” he said. In related devel...