RBA pours cold water on electronic dollars, Bitcoin

RBA pours cold water on electronic dollars, Bitcoin

The Reserve Bank has no plans to issue a digital form of the Australian dollar, although it recognises that it might one day happen.

Reserve Bank governor Philip Lowe, in an address to the Australian Payment Summit, said the RBA had weighed up the merits of an ‘eAUD’, as the payments landscape rapidly changes.

“The short answer to this question is that we have no immediate plans to issue an electronic form of Australian dollar banknotes, but we are continuing to look at the pros and cons,” he said.

Mr Lowe said that although an electronic form of banknotes could coexist with the electronic payment systems operated by the banks, there is no need right now for this form of money.

“It is possible that the RBA might, in time, issue a new form of digital money – a variation on exchange settlement accounts – perhaps using distributed ledger technology,” he added.

“This money could then be used in specific settlement systems. The case for doing this has not yet been established, but we are open to the idea.”

RBA governor not sold on Bitcoin

Mr Lowe also said that as things currently stand, it is hard to see cryptocurrencies like Bitcoin being commonly used for everyday payments.

He gave several arguments against the day-to-day use of Bitcoin:

  • The value of Bitcoin is very volatile
  • The number of payments that can be handled is very low
  • There are governance problems
  • The transaction cost involved in making a payment with Bitcoin is very high
  • A “staggering” amount of electricity is needed to mine each Bitcoin

“When thought of purely as a payment instrument, it seems more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions,” he said.

“So the current fascination with these currencies feels more like a speculative mania than it has to do with their use as an efficient and convenient form of electronic payment.”

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Learn more about bank accounts

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You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

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There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

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Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

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The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

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Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

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Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

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