The Reserve Bank of Australia (RBA) and Treasury have unveiled a three-year roadmap for digital money, as part of research into central bank digital currency (CBDC).
An assessment of CBDCs, alongside a three-year roadmap, are among other topics discussed in the RBA’s report into the future of digital money in Australia published on 18 September.
At the heart of the report is the bank’s opinion that wholesale CBDC would be more beneficial than retail CBDC. A key driver for this is its research, concluding that there is no clear public interest case to issue retail CBDC in Australia.
Additionally, the RBA found that Australians are generally well served by the existing retail payments system, commenting that jurisdictions that have issued retail CBDC don’t have the same reasons as Australia.
However, the bank and Treasury have stated that they remain open to the possibility of changing this viewpoint when other advantages and costs are unveiled and better understood.
In contrast, the pair believe wholesale CBDC could provide several advantages. Brad Jones, Assistant Governor at the RBA, said that its “potential benefits are more promising and the challenges less problematic” compared to retail CBDC.
Jones commented: “The RBA is making a strategic commitment to prioritise its work agenda around wholesale digital money and infrastructure – including wholesale CBDC. At the present time, we assess the potential benefits as more promising, and the challenges less problematic, for wholesale CBDC compared to a retail CBDC.”
RBA’s roadmap
Firstly, the RBA and Treasury have revealed Project Acacia, as its first initiative. This project aims to explore how different forms of digital money, including ESAs, digital tokens and wholesale CBDCs, could be used to help the settlement of transactions in tokenised asset markets.
Additionally, there will be scope to see how these forms of digital money can improve cross-border payments in collaboration with other central banks. This first set is expected to be complete in the second half of 2025.
Additional initiatives will follow after 2025. One is the launch of industry and academic CBDC advisory forums, which will engage stakeholders and gather input from industry and academia on its retail and wholesale CBDC work.
There will also be surveys and consultation methods to measure public engagement in retail CBDC, looking at people’s needs, preferences and concerns regarding a retail CBDC.
Finally, there is a plan to work with the government to consider recommendations for the independent review of the Enhanced Regulatory Sandbox.
Jumping to 2027, the pair will publish a paper around considerations for retail CBDC, which will include an assessment of the experiences of other jurisdictions.
“Next month, we will launch the public phase of Project Acacia, which will explore opportunities to uplift the efficiency, transparency and resilience of wholesale markets through tokenisation and new settlement infrastructure,” concluded Jones.
“This initiative will form part of a larger effort to step up our engagement with industry and other stakeholders on the question of how our monetary arrangements could better support the Australian economy in the digital age.”
Although this roadmap has clearly set out the country’s course of action, it is slightly behind other countries across the world in terms of developing CBDC. Earlier this month, the Central Bank of Brazil confirmed the inclusion of Visa and Santander as the latest payment firms to join its development project of a potential native CBDC.
