Australia could introduce a digital version of its dollar, a senior exec at the country's central bank says, although any state-backed digital currency is in the distant future and likely to circulate in parallel with old fashioned notes and coins.
With cash and cheque usage falling, the Reserve Bank of Australia's head of payment policy, Tony Richards, says that new electronic payments are likely to emerge in the medium term.
In a speech, Richards describes the idea that private currencies such as Bitcoin could displace national alternatives as "improbable" but says that they have stimulated interest in the potential of distributed ledgers.
"A plausible model would be that issuance would be by the central bank, with distribution and transaction verification by authorised entities (which might or might not include existing financial institutions)," says Richards.
While the central banks of the UK, Canada and China have all raised the prospect of introducing digital versions of their currencies, Richards stresses that the RBA is "not actively considering this" and that it is for the "more distant future" and even then would probably circulate alongside banknotes.
This is because of the cybersecurity and cryptography risks involved and doubts about whether these is any real user demand when more traditional real-time payment systems are being built, including in Australia, where a New Payments Platform (NPP) is being set up.
While Australia may not be ready for a digital dollar yet, Richards shared figures during his speech which show that cash and cheques are on the way out. The number of cheques written in the country has fallen from around 50 per capita per year in the mid-1990s to about six per capita in 2015.
Despite this, wary of the UK's bungled effort to phase out cheques, Richards says it is it premature to think about ditching the instrument, saying that a serious discussion on the issue should be put off until 2018, when the NPP is up and running.
Cash is more complicated, says the RBA man, because while transactions have been falling, thanks in part to the rise of contactless payments, the demand to hold cash has continued to grow. "Indeed, in recent years there has been a modest increase in the rate of growth of banknotes on issue, to an annual rate of around 7 per cent over the past couple of years."
With this in mind, far from contemplating ditching notes, the central bank is preparing to upgrade its stock, improving security to take on the counterfeiters.
Meanwhile, Australia's Prime Minister Malcolm Turnbull and Treasurer Scott Morrison have set up an expert advisory group to help make the country the "leading market for financial technology" in the Asia Pacific region.
Taking on the likes of Hong Kong, Singapore and Beijing, the Oz government wants to become the leading regional hub for the fast-growing and lucrative fintech market, championing the likes of crowdfunding, peer-to-peer lending, mobile payments, digital currencies, and robo-advisers.
The new group is established not long after a fintech coalition representing the views of 32 national startups, incubators and investors called on the government to put financial technology issues at the heart of its innovation agenda.
Pointing to the joined-up thinking that has helped propel the fintech community in the UK, US and Singapore, the group penned a letter urging the government to set up a taskforce to address key policy reforms around tax credits and concessions to startups and to deliver regulatory clarity around new innovations in banking.
The new advuisory group will be chaired by Craig Dunn, chairman of the Stone & Chalk incubator and director of Westpac Bank, and include a host of industry names.
In a separate development, local operators of Bitcoin and other digital currency businesses have come together to launch an Australian Digital Currency Industry Code of Conduct. Says the new group's CEO: "The Code of Conduct will provide confidence to consumers, banking partners and regulators that ADCCA Certified members have rigorous probity, anti-money laundering and consumer protections in place."