Australia unveils CBDC proposal as future currency – RBA

The Reserve Bank of Australia (RBA) is open to the use of Central Bank Digital Currency (CBDC) as a futures currency, a government-issued digital currency that represents central bank reserves.

RBA Assistant Governor (Financial System) Brad Jones spoke about the opportunities and challenges of tokenizing assets and money in the digital age in a speech entitled “The Future of Australia's Financial System”. The proposed plan to use CBDCs as a form of money.

Jones began his talk by outlining the use of different types of money throughout history and how financial instruments have evolved over time. Speaking about tokenization and cryptocurrencies in the modern era, Jones mentioned stablecoins and CBCCs.

He explained that Statcoins can be widely used to settle tokenized transactions that are “backed by well-regulated financial institutions and high-quality assets (ie, government securities and central bank reserves); “However, due to the lack of regulatory guidelines; stablecoins issued by private parties often come with higher risk. On the other hand, CBCCs can be a good transactional arrangement for tokenized bank deposits,” Jones said.

The Assistant Governor added that the amount of deposits given by different banks is widely changing (proportionally) on the balance sheet of the Central Bank, which indicates a slight change in the current system. A tokenized deposit between two parties is settled by a balance transfer between the payer and payer's bank (or bulk CBCC).

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Jones also shared some of the findings from the central bank's pilot CBDC program, including areas where CBCCs can add value to wholesale payments, such as facilitating atomic settlement in tokenized asset markets. The pilot project describes the possibilities for bulk CDC to replenish newly privately issued digital currency, such as bank deposits and asset-backed stablecoins.

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