Reserve Bank of Australia (RBA) Governor Michele Bullock has rejected the idea of establishing Bitcoin as a strategic reserve.
During a recent parliamentary inquiry hearing, the governor she said Bitcoin could not play the role of a back-up.
“Why is that? Because back to the same point, it’s doesn’t serve the purpose of money,” she told the Standing Committee on Economics.
“It doesn’t have a solid value. You can’t be guaranteed that what it’s worth today will be worth the same thing tomorrow.”
In addition, Bullock said Bitcoin was “extremely slow” compared to other payment methods.
She explained that people could get transactions through in milliseconds with other payment systems.
However, things are uncertain with Bitcoin, as it may take 10-15 minutes and even more time due to the way the ledger works.
“I just don’t see that it’s got the infrastructure to be a payment system,” Bullock said.
“It’s not a store of value. People regard it as an asset.
“I personally don’t think that it’s going to play a role when you go to your local pizza shop or go to buy your groceries.”
At the same time, the governor said the RBA did not have any view on whether Bitcoin was “more established” than other types of cryptocurrencies.
“The RBA, I don’t think as an organisation, has an opinion on what we should be doing with Bitcoin, or what we should be doing with these meme coins,” she said.
“Some people are finding something interesting to do with them, but they’re not core to the payment system.”
RBA Has Limited Power Over Crypto
A member of the committee raised the issue that around 30 percent of Australians under 27 years old were investing in crypto, which involved significant risk of loss.Pointing to the recent collapse of the meme coin $Libra in Argentina, he asked whether regulators like the RBA could do something to protect people’s crypto investments.
In response, Bullock said that was not the role of the Reserve Bank.
“We don’t have powers in these areas. We don’t regulate consumer safety or investments or any of those sorts of things,” she said.
“It’s a matter for ASIC [Australian Securities and Investments Commission], and I would also suggest AUSTRAC [Australian Transaction Reports and Analysis Centre].”
Meanwhile, RBA Assistant Governor Brad Jones said the government had expressed a desire to take regulatory action in some areas.
“One is to regulate digital exchanges … and also potentially a licensing regime for stablecoins, and depending on the size of that stablecoin that could potentially be, there could be joint supervision between APRA [Australian Prudential Regulation Authority] and ASIC for that,” he said.
United States Establishing Bitcoin Reserve
In a related development, the United States has established a strategic Bitcoin reserve, which functions similarly to the country’s gold reserve, following a Trump’s executive order on March 6.The Trump administration also stated that it was exploring ways to invest and leverage the stockpile of 200,000 Bitcoin tokens under the government’s possession.
Those tokens have a current value of US$17 billion ($26.9 billion), and were obtained through criminal forfeitures.
“We think that the best way to preserve that value is to store these bitcoins for the long term,” said David Sacks, Trump’s special adviser for AI and crypto.
“Bitcoin has often been called digital gold, and what we’re doing with the reserve is effectively creating a digital Fort Knox to safeguard that digital gold.”
