BTC Wires

Reserve Bank of Australia Doesn’t See Much Value In Bitcoin

The Reserve Bank of Australia has released an official article outlining why it feels that Bitcoin can never be a legitimate store of value, at least not as much as fiat currency.

The article examines “why Bitcoin is unlikely to become a ubiquitous payment method in Australia, and summarises how subsequent cryptocurrencies have sought to address some of the shortcomings of Bitcoin – such as its volatility and scalability problems.”

The article details out that there have been a lot of interesting innovations in terms of cryptocurrencies in recent times but ultimately concludes that, despite the various innovations and developments in cryptocurrencies, none are currently functioning as money in the economy. The article further states in its very introduction:

“People are more likely to view cryptocurrencies as a speculative high-risk investment class than a payment system. We see little likelihood of a material take-up of cryptocurrencies for retail payments in Australia in the foreseeable future.”

The authors have presented graphs in the article that depict price fluctuations and constant volatility of the cryptocurrency which has been a troubling concern for the crypto. Basing their argument on that, the RBA believes that Bitcoin’s unstable price makes it an inferior store of value when compared to Australian Dollars (AUD).

RBA’s report also highlighted the fact that,

“While it is possible for an end user to transact in and manage their holdings of Bitcoin without using a third party, the roles undertaken by intermediaries effectively reinserts the need for some form of trust in a central party for most users.”

The article also ventures into the environmental area by speculating about crypto mining-infused global warming, which they particularly find troubling. There is also no proper settlement policy in place, which further hurts BTC’s chances for adoption.

While the article sounds heavily biased, which was quite expected, it does raise some pertinent points about what could possibly hold back widespread crypto adoption. Bitcoin needs to work on these areas if it wishes to emerge as the most superior store of value.