The Reserve Bank of Australia (RBA) has said that it is not worth regulating Bitcoin, arguing that the costs would outweigh the benefits.
The central bank joins the Hong Kong Treasury with such a position. Recently, a top official from the latter said that existing financial regulations, such as those related to anti-money laundering, are sufficient to cover Bitcoin.
In its assessment, the RBA said:
“The bank’s judgement is that the current very limited use of digital currencies means that they do not raise any significant concerns with respect to competition, efficiency or risk to the financial system.”
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Rather, it is more worthwhile to engage in a coordinated cross-border framework, more fitting for Bitcoin’s cross-border mobility.
Intuitively, one can argue that digital currencies shouldn’t require their own regulatory framework. A simpler alternative would see relevant elements of standard regulations extended to digital currencies, where applicable. Such has been the argument of some industry leaders in response to the proposed BitLicense rules, although it can be argued that additional rules are needed to tackle the risks posed by Bitcoin’s quasi-anonymity.
Many governments have expressed willingness to regulate Bitcoin, but concrete action has been more in the form of enacting measures to fight Bitcoin-related crime and the like. It would seem that formal regulation has been less pressing.
The RBA’s comments seemingly do not extend into the realm of taxation, where a defined set of rules is needed in order to adequately assess obligations. Australia has been one of the most active in trying to come up with the right recipe in this area.