tl;dr
Australia's central bank plans to shift its focus from developing a consumer-facing retail central bank digital currency (CBDC) to a wholesale CBDC, intended for transactions between financial institutions. The bank will conduct a 3-year research program, Project Acacia, on the future of digital mon...
Australia's central bank, the Reserve Bank of Australia, has decided to shift its focus from developing a consumer-facing retail central bank digital currency (CBDC) to a wholesale CBDC, specifically intended for transactions between financial institutions. This decision comes after a pilot study for a retail CBDC and aligns with the global trend among central banks to prioritize wholesale CBDCs over retail ones in the next six years.
The bank will conduct a 3-year research program, Project Acacia, focusing on the future of digital money in Australia, including wholesale CBDC and tokenized commercial bank deposits. Brad Jones, Financial System Assistant Governor at the Reserve Bank of Australia, stated that the bank assessed the benefits to the economy as more promising and the challenges less problematic for a wholesale CBDC compared to a retail version.
Issues with retail CBDC highlighted by Jones include high borrowing costs, increased risk of bank runs, and complications in monetary policy. The bank also emphasized the intention to engage with industry partners for innovation in line with the national interest.
The shift in focus follows Australia's CBDC Pilot and Study for the eAUD, which aimed to address issues such as high overseas payment fees and slow settlement times. This move is in line with the majority of central banks globally expecting to implement wholesale rather than retail CBDCs in the next six years.
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