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Australian central bank exploring feasibility of electronic banknotes

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Australian central bank exploring feasibility of electronic banknotes

The Reserve Bank of Australia is weighing the pros and cons of issuing electronic banknotes alongside traditional banknotes, the Financial Times reported Dec. 13, citing Governor Philip Lowe.

Electronic money could be issued and stored in users' digital wallets, which can be used for payments just as traditional notes are.

Further, the Australian central bank is also looking into a new digital settlement system deploying blockchain, or distributed ledger technology. Existing settlement systems use central electronic ledgers to track transactions, but they often depend on manual input and are vulnerable to hacking.

In contrast, a distributed ledger-based system records transactions through a network of computers. The technology would also allow fast transactions to be made with no handling costs, the report said.