The Future of Digital Currency in Australia: Development Plan and RBA Decisions
The Development of Digital Currency in Australia
On September 18, 2024, Brad Jones, Deputy Governor (Financial System) of the Reserve Bank of Australia (RBA), delivered a speech at the Intersekt Conference in Melbourne, discussing the future of digital currency in the Australian financial system. Together with the Australian Treasury, they also released a document regarding central bank digital currencies (CBDCs) in Australia.
RBA’s Strategic Decisions
The RBA made a crucial decision to focus on the development of wholesale digital currency and infrastructure. A three-year research program was developed to explore the future of digital currency in Australia.
Two Types of Digital Currency
In Australia, there exist three forms of money: cash, exchange settlement (ES) balances, and commercial bank deposits, with the latter two being digital. The RBA has preliminarily assessed that central bank-issued retail currency has less potential than wholesale currency.
Debates and Consultations
The specialized audience is engaging in intense discussions on issues related to the introduction of retail digital currency, such as offline resilience and monetary sovereignty. Introducing retail CBDC in Australia would constitute a significant change in the financial system, requiring government approval.
Research and Development Plans
Elements of the three-year program on digital currency in Australia include the Acacia project, a CBDC advisory forum for industry and academia, enhancing the regulatory sandbox, and consulting with the community on retail CBDC. The RBA and the Australian Treasury focus their research on developing wholesale digital markets and analyzing experiences with innovations in retail payments.
The Decision to Implement CBDC
The consideration of introducing digital currency (both wholesale and retail) will necessitate strong political foundations and public demand. The consultation process between the RBA, the Australian Treasury, and the Australian government will be crucial for decision-making. Further research on digital currency will be conducted, taking into account findings from other countries.
