Australia’s Central Bank is Researching on a “Wholesale CBDC”

Less than a month after admitting that it saw no need for a central-bank backed currency (CBDC), the Research Bank of Australia (RBA) is still pushing ahead with research on the technological and policy implications of a potential wholesale digital Aussie as per an update on Oct 14. 

Reserve Bank of Australia Will Continue Researching on a CBDC

Tony Richards, the Head of Payment Policy, while speaking at the University of Western Australia Blockchain, Cryptocurrency, and Fintech Conference, said the central bank was trying to identify conditions that will trigger significant demand for the CBDC. As such it plans to lay out its benefits, design, and policy implications.

The public policy case for the digitized version of the Aussie is “still to be made” by the central bank’s in-house Innovation Lab. 

Earlier work by the lab, of the which the RBA plans to extend in collaboration with third parties, included the development and possible incorporation of a limited Proof-of-Concept of a Distributed Ledger Technology-based intra-bank payment system. 

The system leverages a tokenized CBDC backed by the central bank’s Exchange Settlement Account (ESA) balances. 

Of the many objectives, the central banks want to explore the implications of programmability features of tokenized CBDC and financial assets.

In his words, Tony said:

“Currently, the Bank is collaborating with a number of external parties on a project to extend this proof-of-concept to incorporate tokenized financial assets to explore the implications of delivery-versus-payment settlement on a distributed-ledger platform as well as other programmability features of tokenized CBDC and financial assets.”

The Australian retail and corporate scene, Tony said, is served by modern and efficient payment rails. For instance, the recently launched New Payments Platform operates every day of the week and is data-rich. Additionally, hard cash is popular and is widely accepted as a means of settling transactions.

Central Banks Trying out CBDCs

The concept of digitizing currencies in response to the widespread use of alternative currencies like BTC is gaining traction. 

Earlier this month, together with the Bank of International Settlements (BIS), six banks published a report laying out pre-requisites that must be met for banks seeking to roll out a digital version of its currency.

As BTCManager reported, the Government of Shenzhen, earlier this week, airdropped $7,500 worth of Digital Yuan as part of an ongoing campaign to promote the CBDC.

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