- Philip Lowe, Governor of the Central Bank of Australia stated during the G20 Finance meeting that if the government and the private sector work together the crypto industry can move forward with less risk.
- According to Lowe in this union the Government will develop the regulations while the private sector creates the crypto technology.
- The Third Meeting of Finance Ministers and Central Bank Governors (FMCBG) and Finance and Central Banks of G20 members addressed how stablecoins and DeFi affect global financial systems.
Without fear of being mistaken, cryptocurrencies have come to completely change the scenario of the world economy. They generated a far-reaching impact that made the traditionalists tremble, and just this topic was addressed during the Third Meeting of Finance Ministers and Central Bank Governors (FMCBG) and Finance and Central Banks of G20 members.
During the meeting, finance ministers and central bank governors from the world’s 20 strongest nations discussed how stablecoins and DeFi affect global financial systems, Topic of the forum.
Government and private companies must work hand in hand
One of the statements that most attracted attention during the event was that of the Governor of the Australian Central Bank, Philip Lowe who positioned himself in favor of the development of the crypto industry, which can be achieved at the hands of private industry.
Lowe praised and recognized the virtues of the industry, however, he also recognized the risks that they may entail, which is why the perfect plan for the governor of the Australian central bank is for it to grow together with the government.
“The industry will be better if the private sector takes charge of the developments and these are supported with strong regulation”, stressed the authority, who assured that the risks today in the digital field are very great.
necessary regulation
From his point of view, if the State and more private companies participate in this growing ecosystem, the risks would be significantly reduced. Who does not know the problems (benefits) they face when investing in unregulated digital assets?
One of the examples Lowe gave was the collapse of the Terra ecosystem. Its “stable currency” UST lost parity with the US dollar and everything ended in the worst way: it went to 0 and took a good part of the market. This was added to strong economic measures by the United States, which is not experiencing a phase of grace,
Could this have been avoided? Lowe believes that any problem would be solved if the government is a major player in the industry..
Lowe’s thought is as follows:That the State develops the regulations and laws, while the private sector will be in charge of giving the green light to the technology”.
The study and regulation of stablecoins, mainly, was approved and accepted by Eddie Yue, who is the executive director of the Hong Kong Monetary Authority. Although Yue felt that the “Technology and innovations will help improve financial systems in the future.”
side CBDC
One option that a number of countries have found useful has been that of a Central Bank Backed Digital Currency (CBDC). Lowe ruled it out for the moment due to the “enormous development costs”, as published Bitcoinist.
In July, the National Association of Federally-Insured Credit Unions, a US trade organization founded in 1967, had expressed the same concern.
However, this does not seem to be a problem for many countries that already have them in operation or in the final stretch. This is the case of the Bahamas, China, Jamaica, South Africa, South Korea, France and Ukraine, among others.
Lowe’s philosophy goes against the freedoms proposed by Bitcoin and other cryptocurrencies, although from his position it is logical that they seek control. We will have to wait and see what the next steps are to be followed by Australia, one of the most powerful nations in the world’s economy.
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