The Reserve Bank of Australia will priorities the investigation of wholesale CBDCs in light of the potential challenges and restricted benefits of retail CBDCs.
The Reserve Bank of Australia (RBA) has declared that it will priorities the investigation of wholesale central bank digital currencies (CBDCs) over retail variants, as the latter are associated with potential complexities and limited benefits.
In a speech scheduled to be delivered in Melbourne, Assistant Governor Brad Jones stated that a retail CBDC could present “non-trivial challenges” for financial stability and monetary policy, according to Bloomberg.
Jones characterizes the research on tokenized commercial bank deposits as “an evolution rather than a revolution” in monetary arrangements, and the RBA will immediately concentrate on the development of an Australian wholesale CBDC. It is feasible that this will facilitate interbank payments through blockchain’s high efficiency.
Furthermore, approximately 134 countries and currency unions—which account for 98% of the global GDP—are currently investigating the implementation of a CBDC. The Atlantic Council reports that three countries have currently completed the full deployment of their respective CBDCs.
Jones stated that the Australian government would be responsible for making any decision to pursue a retail CBDC, which would likely involve legislative changes. However, some critics contend that digital payment systems are effective and provide traceable transactions, which raises several privacy concerns. Details of the new arrangement will determine legislative considerations and decisions regarding Australian wholesale CBDCs.
The Reserve Bank of Australia (RBA) has established a three-year plan to investigate digital currency alternatives, which includes an evaluation of the potential of Australian wholesale CBDCs and novel settlement methods to enable tokenized markets by mid-2025. Work will commence in 2026 to investigate the feasibility and potential design of retail CBDCs, with the anticipated completion date of the project being the end of 2027.
Additionally, the bank intends to release a collaborative document on the future of digital money along with the Australian government later on Wednesday. ANZ Group Holdings and Commonwealth Bank of Australia were involved in the pilots of CBDCs on a more local level.
Also Read: California promotes a set of laws to address election deepfakes
Wallets