Dilip Rao is leading a research program at the Digital Finance Cooperative Research Centre, working with the Reserve Bank of Australia to explore options for the digital Australian dollar. Rao said that the Australian Central Bank is exploring 14 possible uses for its own digital currency, and a report on that will be published soon.
Rao said that if the central bank’s digital currencies can’t solve any specific payment problems now, then CBDCs could become a “fallback option” in the future to solve problems not yet suspected of. However, for the mass introduction of the state cryptocurrency, central banks have to answer the question of why people should want to use it;
As Rao put it, CBDC doesn’t have to be used in every transaction. In his view, large institutions that trade tokenized assets may be interested in public stablenecoins because using CBDC can reduce the associated risks.
The main obstacle to implementing any CBDC digital currency could be the need for legislative changes, and that would require support from the public, at least in Australia. In order for such changes to pass through parliament, politicians must “go out to the people” and hold broad public consultations;
These discussions should focus on how public cryptocurrencies can solve people’s problems by making it easier for them to access the financial sector or banking. According to Rao, no politician would do something that would result in a loss of votes.
Many fear CB digital currencies could violate privacy and be used to spy on users. In response to these concerns, in May, U.S. lawmaker Alex Mooney introduced a bill against testing the digital dollar. The Bank for International Settlements (BIS) recently published a report on the prospects for the introduction of state-owned stablcoins, noting the need to address the issue of privacy.