The Reserve Bank of Australia has extolled distributed ledger technology and indicated its potential use within Australian financial services.
In the opening statement to the inquiry into taxpayer engagement with the tax system before the House of Representatives standing committee on tax and revenue last Friday, RBA head of payments policy department Tony Richards said the RBA had been “monitoring closely” the development of DLT technology.
“The bank has previously noted that the distributed ledger and blockchain technologies underlying them have potential for widespread use in the financial sector and many other parts of the economy,” Mr Richards said.
“The greatest potential is likely to be in sectors where workflows involve lots of different parties with no trusted central entity, and where current practices are quite inefficient.”
Mr Richards pointed to oft-suggested uses for distributed ledger technology in the financial sector, which included “correspondent banking and remittances, as well as trade financing”.
He also addressed the increasing popularity of cryptocurrencies, but did not think payment via digital currencies would enter into the mainstream.
“The use of bitcoin and other digital currencies as an actual method of payment remains relatively limited in Australia, as elsewhere,” he said.
“From the bank's payments policy mandate, digital currencies do not currently appear to raise any pressing regulatory issues.”
In his opening statement, Mr Richards also spoke about trends in payments, namely the transition from paper-based payments to digital or electronic methods, and discussed the launch of the New Payments Platform (NPP), scheduled for early next year.