RBA floats 'digital ID' to tackle fraud
The Reserve Bank of Australia (RBA) has proposed the introduction of a digital identity scheme to combat rising fraud bills.
As part of the RBA’s August 2017 meeting, the Payments System Board discussed the potential for the development of a digital identity framework in Australia, believing such a system could mitigate growing rates of credit card fraud.
“Members noted the potential for a framework for trusted digital identity to make online interactions more convenient and secure, including the potential to reverse the rise in fraud rates on card transactions,” the RBA said in a release.
“Members encouraged the payments industry to work collaboratively on digital identity and also noted the importance of engagement between banks and government on this issue.”
Online digital security news portal, SecurityDocumentWorld, welcomed the RBI’s "entry into the discussion on digital ID" as an encouraging first-step in stamping out payment fraud.
“It is highly significant at a policy level because it indicates financial system regulators are increasingly viewing digital identity credentials as a practical way to fix ongoing security weaknesses in online commerce.”
Over the course of the meeting, the board also discussed the potential role for digital currencies in the local payments system.
“[The board] noted recent international work on whether there might be a demand for ‘digital cash’ issued by central banks and, if so, what form it might take.”
The RBA was encouraged “to consider the technical and policy issues associated with digital cash.”