The Reserve Bank of Australia (RBA) has released a comprehensive report that shines a light on the complexities of launching a CBDC in Australia.
Conducted over a year, the research identified a raft of legal, regulatory, technical, and operational challenges that may hinder the future roll-out of a CBDC in the country.
In a controlled environment, the central bank collaborated with a multitude of industry participants on 14 different pilot projects. These projects were designed to evaluate the practical uses of digital currencies backed by the central bank. The report highlights that tokenised money could serve valuable functions, including enabling programmable payments and atomic settlement in tokenised asset markets. Additionally, CBDC could act as a catalyst in the development of new kinds of privately-issued digital currencies, such as tokenised bank deposits or CBDC-backed stablecoins.
While CBDCs could foster private sector innovation rather than replacing it, the report clearly outlines that a lot more groundwork needs to be done. Regulatory frameworks for potential new business models, legal basis for a CBDC, and the integration of a CBDC platform with specific industry applications are all areas that require additional scrutiny. The complexity of these issues suggests that any decision to launch a CBDC in Australia is “likely to be some years away.”
Brad Jones, RBA assistant governor, stated, “The key findings from the project will help to shape the next phase of the RBA’s research programme into the future of money in Australia. Alongside our ongoing work on cross-border payments, this will include deepening our understanding of the role that tokenised asset markets and programmable payments could have in the Australian economy.”
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