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As cryptocurrency makes a sheepish entry into the mainstream, every individual, industry, and nation is finally forced to choose sides between the status quo and the disruption. Numerous entities have also put forth their interests in the ecosystem through various gestures including partnerships, payment acceptance and trademark registrations. Breaking the ongoing adoption streak, the Reserve Bank of Australia (RBA) published an official article detailing their take on crypto adoption. The publication’s introduction claimed,
“People are more likely to view cryptocurrencies as a speculative high-risk investment class than a payment system. We see little likelihood of a material take-up of cryptocurrencies for retail payments in Australia in the foreseeable future.”
Source: Reserve Bank of Australia
Considering the graph’s depicted price fluctuations, RBA stated that the Bitcoin’s unstable price makes it a poor store of value in comparison to Australian Dollars (AUD). It also highlighted that Bitcoin’s failure to generate “network effects” had limited its suitability for widespread household and business payment use due to price volatility, lack of scalability and uncertainty around settlement finality.
It is important to note that while RBA mentioned BTC’s existential limitations could stand as the barrier for widespread adoption, banking giants including JP Morgan have modeled their own versions of cryptocurrency in order to leverage the technology according to their business needs.
In addition to sharing concerns related to crypto mining-infused global warming, RBA’s report also highlighted the fact that,
“While it is possible for an end user to transact in and manage their holdings of Bitcoin without using a third party, the roles undertaken by intermediaries effectively reinserts the need for some form of trust in a central party for most users.”
As a final blow to the notion of crypto adoption, the financial institution mentioned that two major factors, mining difficulty and lack of prompt settlement finality, can be a problem for users especially in cases where goods or services are being delivered in exchange for bitcoins.