Australian Central Bank Sees No Case for Digital Currency

Oct 14, 2020 at 03:59 UTCUpdated Oct 14, 2020 at 04:00 UTC.The Australian central bank sees no need to issue its own retail digital currency just yet, a top official said Wednesday.

Tony Richards, head of payments policy at the Reserve Bank of Australia, told the UWA Blockchain, Cryptocurrency and Fintech conference that his agency had evaluated retail central bank digital currencies and found "No strong public policy case" for introducing a general use version of the Australian dollar.

Still, he did not discount the fact that the bank might change its mind in future: his group will continue to examine the merits or concerns around introducing a CBDC, he said, including "The conditions in which significant demand for a CBDC might emerge."

Central banks worldwide are looking CBDCs and whether it would make sense to create and issue a tokenized version of their national currencies.

Other nations, like the U.S., are still in the early stages of determining whether a CBDC is even desirable.

According to Richards, the RBA looked at a number of factors that could help shape a potential CBDC, including the role of the central bank and private entities; whether it would be account-based or token-based; whether it could be used offline; what degree of anonymity might be allowed; and even whether an Australian CBDC would be based on a blockchain or distributed ledger platform.

Other considerations include the problems a potential retail CBDC would solve and what issues the introduction of such a digital currency might create, he said.

If another central bank does decide to launch a retail CBDC, "There will be many central banks like us who will be closely watching."

"In the meantime, separate to our work monitoring the case for a retail CBDC, the Bank is conducting research on the technological and policy implications of a potential wholesale CBDC," Richards said.

In his words, this wholesale CBDC could be used as an interbank payment system or for tokenized financial assets.