Australian senators propose the Central Bank of Australia to hold Bitcoin as a reserve

posted 12 months ago
The Australian parliament may soon consider adding Bitcoin to the currency reserve holdings of the Reserve Bank of Australia (RBA). Labor senator Sam Dastyari and Liberal senator Jane Hume, acknowledging the increasing importance of cryptocurrencies and blockchain technology, have suggested that the RBA hold Bitcoin in reserve to add versatility to Australia’s growing financial services industry.

A Bitcoin reserve at the RBA would be useful once cryptocurrencies begin to be incorporated into global capital markets. For example, repurchase agreements, securities settlement and underwriting can all be facilitated with blockchain assets.

Beyond enhancing the capabilities of the RBA, a Bitcoin reserve would also boost the prospects of cryptocurrency adoption elsewhere. As the cryptocurrency network effect propagates, the very fact that a major central bank holds Bitcoin would underscore the value of cryptocurrencies and increase confidence in their long-term viability.

An RBA Bitcoin reserve would be a particularly strong signal as Australia is a large participant in global currency and commodity markets. Further, if crypto-denominated transactions became popular in Australian markets, other central banks would feel squeezed to develop their own crypto reserves.

Incorporating Bitcoin into the RBA’s reserve would further integrate cryptocurrencies into the mainstream economy and accelerate the arrival of a free and efficient monetary system.
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