Financial Reform Author Argues: Australia Needs A Digital Currency like Bitcoin

Journalist:
Lester Coleman
March 19, 2015

Dr. Shann Turnbull, an author on reforming the theories of capitalism, has called for a government-supported digital currency to become the main currency of Australia. Writing in Online Opinion in Australia, Dr. Turnbull claims a government-supported digital currency would balance the budget, protect the economy from financial crises, eliminate the black market, reduce taxes, democratize credit and increase prosperity. Dr. Turnbull, principal of the International Institute for Self-governance in Sydney, Australia and co-founder of the Sustainable Money Working Group in the U.K., has authored numerous papers on digital currency and how it can improve the financial systems in different countries.

One reason Dr. Turnbull focused on Australia is because that country has widespread near field communication readers, and most citizens have a Medicare swipe card that links their medical and welfare accounts to a government website. “Australia is well endowed in near field readers,” Dr. Turnbull told CCN.

“Most families and citizens have a government Medicare swipe card that links their health history and welfare accounts to a government web page.”

Swipe cards or mobile phones could become digital purses that could replace all notes and coins. Transactions would only occur between digital purses or accounts registered with the Australian Tax Office (ATO). The system would tag all transactions.

A solution for many countries

While his recent article focuses on Australia, Dr. Turnbull believes many countries have much to gain by using digital currency to manage their money supplies.

Dr. Turnbull said:

“The most important point of my article is that it (digital currency) provides a way for governments who use the Euro to regain their sovereignty over money management. As I stated in my article, digital currency would solve the Greek problem that has a black economy of 27 percent of its GDP, according to the World Bank.”

The Bank of England has noted the opportunity exists for governments to adopt bitcoin technology, the paper notes.

It also notes that Sweden, which leads the world in moving towards a cashless society, is also in a position to make use of digital readers. In that country, welfare recipients could have value added to their digital purses directly by the government from the Internet or retail store digital readers.

“Governments would collect taxes, fines and fees directly from digital purses,” Dr, Turnbull writes. “Banks and credit cards could be avoided to eliminate substantial costs.”

How Australia can benefit

A digital currency could allow Australia to establish a stable and sustainable unit of value. “One that promotes sustainable prosperity not subject to financial crises or manipulations by speculators, hedge funds and currency wars between central bankers,” the paper notes. “For some years, the Reserve Bank of Australia (RBA) has accepted that Australian dollars have been overvalued. This has resulted in less employment in manufacturing and tourism. In addition, educational services have been exported. These outcomes conflict with reasons for the RBA to exist.”

The ATO could provide each taxpayer a statement of their total income and expenditure for the year. “This would substantially reduce accounting and audit costs,” Dr. Turnbull writes. “The production of annual accounts for businesses, local governments and nations would be expedited. More importantly, it would become possible to identify financial frauds, thefts, bribes, money laundering, multinational profits shifting and the funding of terrorists.”

‘Tagged, terminating and tethered’

Modern economists limit their concerns about monetary policy to processes, not the nature of money, the paper states. Policy processes involve what Dr. Turnbull calls the “3Ts” of transmission, traction and timeliness.

“Neglected are the 3Ts of the nature of money, being: tagged, terminating and tethered,” he notes.

He describes the benefits of the 3Ts of “tagged, terminating and tethered” in a paper posted Jan. 15, 2015 on the Social Science Research Network website.

That paper, “Might Supplementary Tethered Currencies Reduce Financial System Risks?” says that “pegged side chain crypto currency technology provides a basis for nation states and/or their bioregions to unilaterally establish sovereignty over their financial systems to minimize crisis contagion by introducing tethered, tagged and terminating (3T) currencies that are better fit for purpose than official digital money.”

Cell phones now provide a way for governments to issue tethered or untethered money to their citizens, the earlier January paper notes. “The whole banking system could be bypassed to stimulate economies from the bottom up. There would be no need for quantitative easing or other unconventional monetary policies with the attendant risks of inflation and/or assets bubbles, etc. because such issues could be designed to be self-financing and self-liquidating; governments could spend money without increasing their debt or tax levels.”

Dr. Turnbull told CCN that Online Opinion in Australia required him to limit his recent article to 1,000 words. Hence, the article omitted a number of important points he has made in his other writings. These include:

• The need for governments to tether, but not back, any currency with a local, renewable, benign and sustainable service of nature.
• The future role of banks.
• Who would issue the currency.

Images from Shutterstock.

Last modified (UTC): March 19, 2015 14:49

Tags: Australia
Lester Coleman

Lester Coleman is a media relations consultant for the payments and automated retailing industries.