Not Stellar or Ripple: Australia to use China’s digital Yuan for cross-border payments

  • Australian Senator Andrew Bragg said that Chinese banks operating in the country could facilitate the use of the Digital Yuan.
  • The senator also slammed the current Labor government for disregarding the progress made by the previous government on crypto regulations.

In an interesting development, an Australian Senator has proposed the use of China’s central bank digital currency (CBDC) – Digital Yuan – for cross-border payments. The recent proposal came from Australian politician Andrew Bragg, a senator for the Australian state of New South Wales.

On Monday, September 19, Bragg proposed strict reporting requirements for banks that could make the availability of Digital Yuan for use in Australia. As we know, China has been aggressively working on pushing the use of the Digital Yuan in the international market. The Asian economic giant has already conducted several CBDC tests in the country over the last two years.

In his draft “Digital Assets (Market Regulation) Bill 2022”, Bragg has identified seven Chinese banks running operations in Australia. This includes the Bank of China as well as the Agricultural Bank of China. Bragg believes that these banks could potentially facilitate the use of the Digital Yuan in the country. The bill also proposes disclosure requirements for all the designated banks.

It involves reporting Australian businesses holding the Chinese CBDC, as well as the total number of Digital Yuan held by the customers of the bank. In an interview with RN Breakfast on Monday, Bragg said that Australia needs to be prepared for the widespread use of Digital Yuan in the country. He added that this would give the “Chinese state enormous power, economic and strategic power that it doesn’t have today”.

Australian Senator slams the opposition

The Australian Senator Andrew Bragg slammed the current Labor government for their skeptical stand on digital assets. He added that such a bill was necessary due to “inaction” from an “indolent” government that believes cryptocurrency is a “scam” and is “only responsive to vested interests”.

Australia’s new Labor government, led by Prime Minister Anthony Albanese recently introduced token mapping to identify the characteristics of all crypto tokens. Australia’s central bank also started the pilot tests for having its own CBDC in the country. As per the previous reports, crypto giants like Ripple and Stellar with Australia’s financial giant Novatti Group on an AUD-pegged stablecoin.

Senator Andrew Bragg further slammed the new government for starting the work from scratch and disregarding the “enormous progress” made by the previous coalition government. Previously, Bragg had also chaired a senate committee over how to improve crypto regulations.

In his recent draft bill, Bragg has proposed licensing framework for crypto exchanges, stablecoin issuers, and custody service providers. Private bills usually have slim chances of passing through parliamentary procedures. But Bragg said that he remains optimistic on the matter.

About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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