CBDCs Likely ‘Some Years Away’ For Australia

A central bank digital currency (CBDC) may not be in Australia’s near future.

That’s according to a report issued Wednesday (Aug. 23) by the Reserve Bank of Australia and Digital Finance Cooperative Research Centre into the opportunities presented by CBDCs.

“Considering the broader context — where the Australian payments system is currently meeting most of the needs of end users and work on CBDC in advanced economies is generally still in an exploratory stage — it is likely that any serious policy consideration of issuing a CBDC in Australia is still some years away,” the central bank wrote.

Still, the report said researchers determined that a CBDC has the potential to support increased “efficiency and resilience” in some parts of the payments system, with evidence showing that “broad access” to a CBDC could support new or more efficient markets. 

“There was particular interest from industry in exploring how the development of tokenized asset markets could be facilitated by the introduction of a CBDC,” the report said.  

Some participants argued a CBCD could yield new types of privately-issued payment instruments and infrastructure, such as CBDC-backed stablecoins, thus making the digital currencies a “complement to, rather than substitute for, private sector innovation.”

The report noted that the project raised a number of questions and issues that must be considered, such as the need for further study “of the legal underpinnings of a CBDC.”

The bank’s findings come at a time when 93% of the world’s central banks are in at least some stage of deploying — or at least considering — a CBDC. 

The report also follows another report by Canada’s central bank two weeks ago, which appears to question whether these digital currencies have a place in commerce and financial services.

One of the main objectives is to deploy CBDCs to widen financial inclusion and consumers’ access to financial services, but the report contended there are few reasons for the CBDCs to be out in the world.

“For a payment-oriented CBDC to successfully address unmet payment needs, the main consumer groups — who already have access to a range of payment options — would have to widely adopt the CBDC and use it at scale,” the Bank of Canada argued.

“If domestic retail use cases may not materialize, there’s at least the possibility that CBDCs may find some footing in cross-border use cases,” PYMNTS wrote earlier this month after the Canadian study. “Wholesale CBDCs — where commercial payments are a feature of cross-border trade — may be valuable.”