The Reserve Bank of Australia will launch a 3-year program on the future of digital money.
The RBA and Treasury will release a joint paper on central bank digital currency (CBDC).
The research program will focus on wholesale CBDC and tokenized commercial bank deposits.
The Reserve Bank of Australia (RBA) has proposed to launch a three-year applied research program on the future of digital money in the country. On Wednesday, Brad Jones, the Assistant Governor of the bank, made the statement at the Intersekt Conference in Melbourne. Further, he added that with the support from the Payment System Board, the agenda on wholesale money and infrastructure is prioritized. This includes wholesale central bank digital currency (CBDC) rather than retail CBDC.
According to an official statement released by the bank, Jones asserted that wholesale CBDC is less challenging than retail CBDC. In turn, this enhances monetary arrangements and benefits the economy better. Additionally, this will stabilize the bank’s role in the settlement of wholesale market transactions. Jones stated that three forms of money exist in the country. They are physical cash, exchange settlement balances, and commercial bank deposits. Of the three, the last two are digital. Although digital money is dominant in the country, the CBDC has more weight in terms of privacy, safety, and freedom.
Jones asserted that the research program ‘Project Acacia’ will focus on various elements. However, its primary aim is to explore wholesale CBDC and tokenized commercial bank deposits. The project will help to understand new ledger arrangements and concepts in tokenized markets. This will further benefit the Australian financial system and promote a wider economy.
In the case of a retail CBDC, there are fewer benefits. The Assistant Governor stated that the wholesale CBDC is fundamentally different from retail. He added that the wholesale CBDC could be issued to financial institutions like exchange settlement balances. This will make the wholesale CBDC a safe asset in the settlement of wholesale market transactions. Jones committed that if a public policy arose to issue a retail CBDC, then the government might take the decision after consulting with RBA and Treasury.
The post Australia’s Central Bank to Launch a 3-year Program on CBDC appeared first on CryptoTale.
