Australian Central Bank not supportive of CBDC development for the nation

The Reserve Bank of Australia's (RBA) Head of Payments Policy, Tony Richards, recently commented on the RBS's stance toward a Central Bank Digital Currency (CBDC). The tone of the commentary was negative on the development of a CBDC, although the issue wasn't discounted entirely.

He stated,

“Even though the use of cash for transactions is declining, cash is still widely available and accepted as a means of payment...In addition, Australian households and businesses are well served by a modern, efficient and resilient payments system that has undergone significant innovation in recent years, including the introduction of the New Payments Platform, which is a real-time, 24/7 and data-rich electronic payments system.”

Why it matters: The RBA appears to be bucking the trend of major central banks promoting the development of a CBDC. Australia is a relatively small economy, and the RBA may not want to take the initiative of creating its own CBDC, until it sees what happens in larger economies, like the UK and USA. While many central banks are promoting CBDC development, few are willing to disclose how the CBDC would help the bank to better administer a national currency. Most clearance systems are digital, especially for domestic economies. The real issue may be that the biggest economies in the world are facing an existential crisis, and will need to remonetize in the near future with the introduction of CBDCs.

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