To cap off the week, National Australia Bank Ltd (ASX: NAB) shares finished 0.8% higher on Friday. This followed comments from a senior executive at NAB on how Australia should combat the risk of cryptocurrencies to the financial system.
Coincidentally, or not, it comes at a time when some of the more well-known cryptos are surpassing, or at least nearing, all-time highs. For instance, Bitcoin (CRYPTO: BTC) is currently worth approximately $83,800 and Ethereum (CRYPTO: ETH) is now around $6,100.
Perhaps the most mind-blowing number is that the global crypto market is now worth $3.69 trillion. To put this into perspective, that is more than two times Australia's annual gross domestic product. As such, some fears are beginning to build that the sheer size of the crypto market could be a concern.
Let's have a look at what one exec suggests Australia should do.
NAB shares a desire of taking the Aussie dollar digital
If you own NAB shares and invest in cryptocurrencies, the latest comments from NAB's head of digital innovation and sustainability, Lisa Wade, might be of interest to you.
Speaking at a webinar held by Blockchain Australia, Wade revealed her take on the climate of digital currencies. The comments voiced concern for what the new currencies could do to the financial system.
Namely, the risk of excessive leverage and under-collateralisation in digital asset markets. In fact, Wade shared unease about the risk of crypto being the instigator of the next financial crisis.
To tackle this potential issue head-on, Wade suggested the government and Reserve Bank create and issue its own central bank digital currency (CBDC). By doing so, Australia might then have a chance of keeping up with the fast-changing digital currency space.
Having a really solid CBDC and global infrastructure is really important, so large transactions can happen, and we can get to institutional quality because the functionality and programmability [of digital money] is so incredible for de-risking assets and investments.
Lisa Wade, NAB
More is being done on this front, with the RBA putting together a report on the potential for a CBDC. Currently, this potential Aussie digital currency is known as Project Atom, and both the Commonwealth Bank of Australia (ASX: CBA) and NAB have a share in its conception.
