The Reserve Bank of Australia (RBA) stated in an official document that in as much as the traditional financial system is still working efficiently in Australia, virtual currencies will not be widely used.
The publication which was written by analysts from the payments policy department at RBA revealed that because of some issues, there is “little likelihood of a material take-up of cryptocurrencies for retail payments in Australia in the foreseeable future”. The writers described the term “scalability trilemma” to mean that crypto cannot be used to solve more than two basic attributes like scalability, security, and decentralisation.
Also, the document revealed that cryptos will never possess some characteristics and it will make the asset less attractive.
The paper states that:
“In practice, these trade-offs are incremental; increasing the scalability of a blockchain does not require it to become entirely centralised or insecure, but more centralised or less secure.”
High volatility is another thing hindering the wide adoption of crypto assets says the authors of the document. However, social media giant Facebook’s new crypto project Libra is expected to help find a solution to this problem as it is supported by fiat currencies, and although it lacks decentralisation, on depends on a central body to purchase and maintain the assets supporting the stablecoin.
Moving further, the RBA gave instances whereby some exchanges who claimed that the use of stablecoins as a form of payment is low and thus has affected the supply of Australian-dollar-linked stablecoins, tried to unveil stablecoins in the country.
The first instance to be mentioned was that of the first Australian Dollar (AUD)- backed stablecoin AUD Ramp which was launched in September 2018 but totally lost its value after 137 coins were deployed. Another one is that of Trust Token which was launched in April 2019 but has reportedly never issued a token.