Libra is a “stablecoin” designed by the Libra Association, which includes Facebook subsidiary Calibra, Uber and Spotify.

Stablecoins differ from other cryptocurrencies in that they are backed by a reserve of assets; in this case, a basket of bank deposits and short-term government securities denominated in a range of national currencies. This is meant to prevent the kind of volatility that has sent Bitcoin’s price on a roller coaster ride.

But the RBA is skeptical of Libra’s legality.

"In October, the G7 published a report on global stablecoins, recognizing that they have the potential to be more efficient and inclusive than existing payment methods, particularly for cross-border payments," the RBA wrote in its submission to the Senate Select Committee on Financial Technology and regulatory technologies.

"However, the G7 also noted that such proposals pose significant legal and regulatory risks, including to consumer/investor protection, data privacy, monetary policy and financial stability."

“Accordingly, he cautioned that private sector global stablecoin initiatives should not be allowed to launch until all risks and regulatory requirements have been addressed. The bank supports this view.”

It is a rare departure for the RBA, which has thrown its weight behind a number of initiatives to further digitize the Australian economy.

The RBA also questioned whether Australians would actually use the stablecoin if it entered the country.

"In Australia, it is unclear whether there will be strong demand for global stablecoins even if they meet all regulatory requirements, particularly for domestic payments," the report said.

"Australia is already well served by a range of low-cost and efficient real-time payment methods, such as NPPs, which use funds held in accounts at prudentially supervised financial institutions."

"Furthermore, while Australians may not have been well served by banks providing cross-border payment services in the past, a number of new non-bank digital players have entered the market in recent years, offering significantly cheaper and faster money transfer services."