Regulation of the digital currency marketplace would need to be co-ordinated by a global body such as the Basle-based Bank for International Settlements, according to the Reserve Bank of Australia.
The Reserve Bank stated in a response to the Australian Senate Economics References Committee Inquiry into digital currencies that “digital currencies represent an interesting development in the payments and financial system landscape. The concept of a decentralised ledger is an innovation with potentially broad applications for a modern economy.”
The Reserve Bank also noted that given the very limited use and acceptance of digital currencies in Australia, bitcoin and other digital currencies do not currently raise any issues in terms of monetary policy and financial stability mandates.
In the event that the use of a particular digital currency was to grow significantly and to raise public interest concerns, the Reserve Bank says that it would consider whether it would be desirable and feasible to designate it as subject to regulation and to then impose standards on participants in that system.
The Reserve Bank also warned that there could be unintended consequences of heavy-handed regulation, stating that: “It is currently unlikely that any benefits of regulation would outweigh the potential costs.”