CDS Crypto News Australia Shifts Focus to Wholesale CBDC, Citing Greater Economic Benefits
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Australia Shifts Focus to Wholesale CBDC, Citing Greater Economic Benefits

The Reserve Bank of Australia shifts its focus to developing a wholesale CBDC, citing greater economic benefits and fewer challenges compared to a retail CBDC, with a three-year research plan underway

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Australia Shifts Focus to Wholesale CBDC, Citing Greater Economic Benefits

Australia Shifts Focus to Wholesale CBDC, Citing Greater Economic Benefits

The Reserve Bank of Australia (RBA) has announced a strategic pivot towards developing a wholesale central bank digital currency (CBDC), citing the potential for greater economic benefits and fewer associated challenges compared to a retail CBDC.

According to the RBA, the advantages of a wholesale CBDC are more compelling for Australia’s financial system, while the benefits of a retail CBDC remain “modest or uncertain” at this time. Introducing a retail version would require a “significant change” to the country’s financial landscape. Assistant Governor Brad Jones noted that many of the international arguments favoring retail CBDCs are either less relevant to Australia or carry uncertain advantages when weighed against the potential complexities.

While the central bank is not ruling out the possibility of a retail CBDC in the future, Jones emphasized that any such move would need to be justified by a strong public policy case and would likely require legislative changes. “Ultimately, the decision to implement a retail CBDC would rest with the Australian Government,” he said, highlighting the necessity of close collaboration with the Treasury and other key government entities.

Australia Shifts Focus to Wholesale CBDC, Citing Greater Economic Benefits

Speaking at a conference on September 18, Jones reiterated the RBA’s focus on wholesale CBDC development, characterizing it as an “evolutionary rather than revolutionary” enhancement to Australia’s existing monetary systems. He emphasized that a wholesale CBDC, unlike its retail counterpart, would be more of a natural extension of the country’s current financial infrastructure, particularly in systemically important markets.

To advance the wholesale CBDC initiative, Jones outlined a three-year research agenda aimed at exploring digital money solutions. This will involve collaboration with industry participants to develop a central bank digital currency and tokenized commercial bank deposits. The project will examine emerging ledger technologies, including programmability and atomic settlement, to assess potential benefits for Australia’s financial architecture.

Australia Shifts Focus to Wholesale CBDC, Citing Greater Economic Benefits

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