Consumer-focused digital tokens issued by private companies may be better than central bank-issued tokens if they can be properly regulated, Australia’s central bank chief said today in a panel discussion, Reuters reported.
Phillip Lowe, speaking at a meeting of G20 finance officials in Indonesia, said: "If these tokens are going to be used widely by the community, they are going to need to be backed by the state, or regulated just as we regulate bank deposits.”
He added: "I tend to think that the private solution is going to be better — if we can get the regulatory arrangements right — because the private sector is better than the central bank at innovating and designing features for these tokens."
Lowe and the other panelists agreed that more needed to be done to create an appropriate regulatory system, Reuters said.
The risk to financial systems was underscored in May when crypto markets were sent tumbling by the collapse of stablecoin TerraUSD and its paired token Luna, the report said.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.