Australia is investigating a digital currency, or e-dollar, but its benefits seem slight and the risks to privacy large
theconversation.comWe are used to thinking of money as notes and coins, the kind most of us hold in our wallets. But most money – in Australia it’s 96.3% – is digital, held by financial institutions and moved around via bank transfers, debit cards and credit cards.
Late last year Treasurer Josh Frydenberg promised to consult about introducing a third type of currency, a central bank digital currency, and asked the treasury to come up with a position by the end of 2022.
A central bank digital currency (CBDC) would be an “e-dollar”, each one worth $1 dollar, but able to be held digitally without being put into a bank – such as on computers or in digital wallets on phones.
It could allow direct consumer-to-consumer and consumer-to-business payments without the intervention of financial institutions, and allow people who don’t want to use banks to hold funds in a form that’s safer than cash.
