The Reserve Bank of Australia (RBA) has announced that it will prioritize exploring the use cases for a wholesale central bank digital currency (CBDC), according to a report by Swati Pandey for Bloomberg. While the idea of a retail CBDC has been widely discussed globally, the RBA’s Assistant Governor Brad Jones emphasized that such a move could present significant challenges to financial stability and monetary policy. He stated that retail CBDCs would introduce complex issues that may outweigh potential benefits.
As per Bloomberg’s coverage, the RBA’s immediate priority involves launching a new initiative with industry partners to explore the use of wholesale CBDCs and tokenized commercial bank deposits. Jones indicated that this move toward a wholesale variant would represent an evolution of Australia’s current monetary framework rather than a radical shift. He noted that this project is particularly important as central banks worldwide are exploring blockchain technology to improve the speed and cost of interbank payments.
Bloomberg cited data from the Atlantic Council highlighting that 134 countries and currency unions, collectively representing 98% of global GDP, are currently investigating the development of CBDCs, with three nations having fully launched such systems. Despite the global trend, critics caution that CBDCs could raise privacy concerns due to the potential for transaction monitoring, Bloomberg noted.
In his speech, Jones clarified that should a public policy case for a retail CBDC emerge, the Australian government would have the final say, and legislative changes would likely be required. Meanwhile, the decision-making process for a wholesale CBDC would vary depending on the specifics of the arrangement. Jones also outlined a three-year roadmap for digital money development, which per the Bloomberg report, includes evaluating the potential benefits and design challenges of a retail CBDC starting in 2026.
Furthermore, Bloomberg pointed out that local institutions like ANZ Group Holdings Ltd. and Commonwealth Bank of Australia Ltd. have already participated in pilot projects to explore the feasibility of a CBDC. As Jones laid out, the RBA and the Australian government plan to publish a joint paper later this week, offering further insights into the future of digital currency in the country.
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