- Priorities of the Reserve Bank of Australia
- Benefits of Wholesale CBDC
- Future of Retail CBDC in Australia
Australia's central bank has announced a shift toward wholesale CBDC development, citing greater economic benefits and fewer challenges compared to a retail version.
Priorities of the Reserve Bank of Australia
The Reserve Bank of Australia (RBA) has decided to focus on the development of a wholesale Central Bank Digital Currency (CBDC), citing greater economic benefits and fewer challenges for the country's financial system. In a speech on September 18, RBA Assistant Governor Brad Jones emphasized that a wholesale CBDC represents more of an evolution than a revolution in existing monetary systems, particularly in the context of systemically important markets.
Benefits of Wholesale CBDC
To prioritize a wholesale CBDC, Jones announced a three-year research initiative into digital money, with immediate plans to collaborate with the industry on this type of central bank digital currency and tokenized commercial bank deposits. The central bank aims to explore new ledger technologies and concepts such as programmability and atomic settlement to assess potential gains for Australia's financial infrastructure.
Future of Retail CBDC in Australia
In contrast, the RBA views the benefits of a retail CBDC as “modest or uncertain at the present time,” citing that it would represent a “significant change” to Australia's financial arrangements. Jones also highlighted that many of the international arguments in favor of retail CBDCs are less relevant to Australia or “uncertain at the present time, relative to the challenges it would introduce.” While the RBA remains open to exploring retail CBDC in the future, Jones indicated that any move in that direction would require a public policy case and “legislative change,” aligning with international norms. “As such, the Australian Government would ultimately decide whether to introduce a retail CBDC,” he said, underscoring the need for close coordination with the Treasury and other government bodies.
The Reserve Bank of Australia takes a measured approach to digital currency development, prioritizing wholesale options that can bring significant economic benefits. The future of retail digital currency remains uncertain and will depend on further work on policy and legislative aspects.
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