Australia Still In The Evaluation Stage Of CBDC Adoption

By Ray Crawford·14 October 2020·2 min read

Key Points

Australia's central bank isn't rushing into a digital currency.
Tony Richards, who oversees payments policy at the Reserve Bank of Australia, explained that an examination of central bank digital curr

Australia's central bank isn't rushing into a digital currency. Tony Richards, who oversees payments policy at the Reserve Bank of Australia, explained that an examination of central bank digital currencies hasn't revealed a compelling reason for the RBA to move forward at this time. "Despite declining usage of physical money for everyday transactions, cash remains readily accessible and widely recognized as payment," Richards noted. "Furthermore, Australians—both individuals and organizations—benefit from an up-to-date, well-functioning payment infrastructure that has seen considerable modernization, including launch of the New Payments Platform, a 24/7 real-time system enriched with data capabilities for electronic transactions."

728×90

Still, the RBA isn't closing the door entirely. "Our institution will remain engaged in assessing whether a CBDC makes sense, including examining implementation approaches, potential advantages, regulatory considerations, and circumstances under which genuine appetite for digital currency might develop," Richards indicated.

This assessment comes as institutions globally weigh similar questions about digital tender. The Bahamas and China—which is actively piloting its digital currency and electronic payment initiative—have emerged as leaders in this space. Meanwhile, Washington continues preliminary work to gauge whether such a system could work in practice and deliver tangible benefits.

The Australian central bank is gravitating toward a different approach: focusing on "wholesale" applications. According to Richards, this framework could facilitate transactions between banks or serve markets for tokenized assets. Deliberations are taking into account multiple technical and policy considerations: the role of the central bank itself, how much transaction privacy the currency would offer, whether it would operate as tokens or accounts, what underlying system architecture it would use—whether blockchain or blockchain technology—and crucially, whether it could function without internet connectivity.

MiningPool content is intended for information and educational purposes only and does not constitute financial, investment, or legal advice.

728×90