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Own NAB shares? Here’s the bank’s proposal to stop crypto mania getting ‘really ugly’

A possible solution to a growing risk…
The post Own NAB shares? Here’s the bank’s proposal to stop crypto mania getting ‘really ugly’ appeared first on The Motley Fool Australia. –

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.

The post Own NAB shares? Here’s the bank’s proposal to stop crypto mania getting ‘really ugly’ appeared first on The Motley Fool Australia.

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More reading

What these three experts are saying about the CBA crypto service

The Ethereum (CRYPTO: ETH) price just hit all-time highs after a strong October

The first crypto ETF (ASX:CRYP) has just hit the boards. Here’s what you should know

Why did the Bitcoin (CRYPTO:BTC) price have such a great month in October?

CBA (ASX:CBA) just became the first Aussie bank to offer Bitcoin and crypto services

Motley Fool contributor Mitchell Lawler owns shares of Bitcoin, Commonwealth Bank of Australia, and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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