The Reserve Bank of Australia (RBA) has confirmed it will not be pursuing a retail central bank digital currency (CBDC) in the near future. Instead, the central bank will channel its resources into developing a wholesale CBDC, according to a speech delivered by Assistant Governor Brad Jones on September 18 at the Intersekt Fintech Conference in Melbourne.
Focus on Wholesale CBDC
The decision to focus on wholesale CBDC comes after extensive research by the RBA, which concluded that a retail version would not deliver significant innovation for public use in Australia. On the other hand, a wholesale CBDC offers a range of advantages for both commercial and central banks, including reduced counterparty risks, enhanced liquidity, increased transparency, and the potential for lower operational and compliance costs.
Project Acacia
The central bank’s most immediate priority, according to Jones, is to launch the public phase of Project Acacia, which will explore the use of wholesale CBDCs and tokenized commercial bank deposits. This initiative will also assess cross-border applications, working in collaboration with other regional central banks. Project Acacia is expected to build on previous research and engage with industry stakeholders, academics, and the public to further explore the potential of CBDC in Australia.
Rise in Crypto Scams
Meanwhile, the RBA’s announcement comes amid rising concerns about cryptocurrency-related frauds in Australia. According to the Australian Federal Police (AFP), Australians reported losses of around $122 million in crypto investment scams over the past year.
The Reserve Bank of Australia (RBA) has decided to prioritize the development of wholesale central bank digital currencies (CBDCs), foregoing the retail version. This decision is based on extensive research and involves launching Project Acacia to explore the potential of wholesale CBDCs.
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