Australia Reveals Wholesale CBDC Program Plan
19 Sep, 2024 ● Crypto News
The Reserve Bank of Australia (RBA) has announced that it will not be pursuing a retail Central Bank Digital Currency (CBDC) in the near future, opting instead to focus on launching a wholesale CBDC.
During a speech on September 18 at the Intersekt Fintech Conference in Melbourne, RBA Assistant Governor Brad Jones outlined the central bank's three-year roadmap, which primarily emphasizes the development of a wholesale CBDC:
“I can confirm that the RBA is making a strategic commitment to prioritize its work agenda on wholesale digital money and infrastructure – including wholesale CBDC – rather than retail CBDC.”
Jones explained that the RBA's research found that a retail CBDC offered limited potential for meaningful innovation in public use within Australia, while a wholesale CBDC could provide several key advantages for both commercial and central banks.
These benefits include reducing counterparty and operational risks, improving transparency and auditability, enhancing liquidity and transaction capabilities, and lowering intermediary and compliance costs.
He further noted that the potential advantages of a retail CBDC for the Australian public appeared "modest or uncertain," and that implementing a retail digital currency could introduce several challenges, such as higher borrowing costs, an increased risk of bank runs, and complications in enforcing monetary policy.
Jones stated that the central bank's "most immediate priority" is to launch the public phase of Project Acacia, which will explore wholesale CBDC and tokenized commercial bank deposits.
Project Acacia aims to build on the central bank's prior research into CBDCs and investigate future cross-border applications in collaboration with regional central banks.
The project also plans to establish industry and academic advisory forums on CBDC, support reforms in regulatory sandboxes for financial innovation, and engage with the public regarding a retail CBDC.
Jones also mentioned that the RBA is conducting further research into the potential benefits of asset tokenization and the role of blockchain and smart contract technology in the central bank's financial operations:
“The programmability of tokens via smart contracts, and the ability to free up collateral and reduce counterparty risk by atomically exchanging money and assets on the same ledger, have been of particular interest in experimental research.”
According to the Atlantic Council, 134 countries, representing 98% of global GDP, are currently exploring central bank digital currencies.
It also revealed that 66 countries are in the advanced stages of exploration, development, pilot, or launch.
Sources:
https://cointelegraph.com/news/reserve-bank-australia-launches-three-year-program-wholesale-cbdc
