The following except is taken from an address by RBA Governor, Philip Lowe, delivered on 22 July 2022.
"A lesson from history is that what a society uses as money changes with technology. And once again, recent advances in technology are changing the nature of money. Most money these days is digital and is able to be moved around very quickly. In Australia, most people can now move money between bank accounts in less than 10 seconds any time of the day or the week – not the days that it used to take. And on the horizon is the possibility of programmable money, which contains self-executing code that triggers a payment when a specified condition is satisfied. Also on the horizon is the potential tokenisation of bank deposits, which could facilitate the tokenisation of other physical and financial assets. This, in turn, could unlock a wave of innovation and productivity growth across financial services.
A second lesson from history is that money works best when it is backed by the central bank or by the state. The backing by a central bank engenders trust, encourages widespread acceptance and provides stability in times of stress. In the past, privately backed money has all too often ended in losses for investors and financial instability. While I don't think of most of the crypto universe as money, the recent collapse of the ‘TerraUSD stablecoin’ serves as a reminder of this point.
The strategic issue here for central banks and governments is how to capitalise on the benefits of the new technologies and new forms of money, while at the same time preserving the stability and other benefits that come from a system underpinned by central banks. This is likely to require a strong regulatory regime to deal with payment stable coins and perhaps central banks issuing a form of digital currency. These are issues that we are working on with other regulators in Australia and other central banks, given their potential to reshape our financial systems."
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In other words,
Soon, Australians (and indeed the World), will have a programmable, digitised Central Bank Digital Currency/Token on a Blockchain ledger, linked to an individualised Social Credit Score that shall determine a restricted selection of Goods and Services that every Citizen will only be deemed allowed to purchase.
