One of the biggest challenges central bank digital currencies (CBDCs) have faced in their development is who will actually use them. After all, if a country’s general public is happy with its current payment methods, why would they change? A new report from the Reserve Bank of Australia (RBA) supports this as it reveals public interest in a retail CBDC has yet to emerge in the country.
The retail payments system and the capabilities currently in place are generally serving Australians well.In jurisdictions that have issued a retail CBDC or indicated that it is quite possible in coming years, the main motivations have less resonance in Australia. Nonetheless, the RBA and Treasury remain open to the possibility that this assessment could change over time as potential benefits and costs are better understood, both internationally and in a domestic context.
The report also highlights the role that a wholesale CBDC, alongside other forms of digital money and infrastructure upgrades, could play in enhancing the functioning of wholesale markets in Australia.
Brad Jones, assistant governor (financial system) at the RBA said: “the RBA is making a strategic commitment to prioritise its work agenda on wholesale digital money and infrastructure – including wholesale CBDC. At the present time, we assess the potential benefits as more promising, and the challenges less problematic, for wholesale CBDC compared to a retail CBDC.
“Next month, we will launch the public phase of Project Acacia. It will explore opportunities to uplift the efficiency, transparency and resilience of wholesale markets through tokenisation and new settlement infrastructure. This initiative will form part of a larger effort to step up our engagement with industry and other stakeholders on the question of how our monetary arrangements could better support the Australian economy in the digital age.”
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