Bitcoin is a path breaking technology that is speculated to change the way money has been handled so far around the world. However, despite its utility as a digital virtual currency, it is not entirely free from all the risks. Although, after spending months being scrutinized by Australian Senate Inquiry, Bitcoin receives a moment of temporary relief after Australian Central Bank bailed out on regulating the crypto currency.
No regulation required as of now
Reserve Bank of Australia believes that Bitcoin is at a nascent stage right now and does not require regulation at its current state. They also went on to say that since Bitcoin is only restricted in usage by a small group of people and not masses, it is not a threat as such to the existing financial systems. To prevent additional costs to the national exchequer, the regulation of the currency has been withheld for the moment.
They will resume its regulation once it gains significance
RBA also clarified that it will be inducted into the existing framework of regulation once it grows prominence in the market. Up until that moment, digital currencies will not be undergoing scrutiny. Once it becomes significant in terms of users and transactions, the banks will be made liable to impose the specific standards so that they can be treated like the existing financial instruments. To incorporate into the complex system of regulatory framework, a financial system inquiry report is expected that will determine its stand in terms of treatment as a potent method of exchange.
Regulation Benefits do not outweigh the cost incurred
The bank feels that the limited usage of the currency so far does not raise any red flags with regards to efficiency, competition or the threat to the existing financial systems. This is why it is irrelevant to spend huge sums of money in regulating the currency in its current stage.
They also took this moment as an opportunity to clarify that it is outside the bank’s scope of work to monitor the digital currencies and are not technically liable to be regulated at all. They insist that it is authorities like taxation, consumer protection, anti-money laundering and counter-terrorism should more attention into the working of Bitcoin as it is of more consequence to them than RBA. Until that moment, Bitcoin can enjoy the reprieve until it comes back into the attention for wrong or right reasons.
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