Australian central bank governor backs private sector crypto technology

What

Australian central bank Governor Phillip Lowe believes that a private solution to crypto will be “better” as long as risks are mitigated through regulation

Why 

Speaking at a G20 finance meeting in Indonesia, Lowe noted that private companies should develop the technology while regulations should come from the government

What next

The Governor cited “very significant costs” if a central bank was tasked with creating a digital token system, referring specifically to stablecoins

The story

During a G20 finance meeting in Indonesia, Australian central bank Governor Phillip Lowe alongside other officials, discussed the impact of stablecoins and decentralised finance (DeFi) on global financial systems.

Speaking on the topic, Lowe said that while regulation when dealing with cryptocurrencies should come from the government, a private solution handling the creation of the technology to build a digital token system would “be better” coming from private companies.

According to Lowe, private companies are “better than the central bank at innovating” the best features for cryptocurrency and cited significant costs should a central bank look to create the technology.

“There are also likely to be very significant costs for the central bank setting up a digital token system,” he said.

To learn more about stablecoins, visit our learning resource here.