Group items tagged

The Reserve Bank of Australia (RBA) and the Australian Treasury published a report summarizing their research to date on central bank digital currency (CBDC) and their current assessment of CBDC issues in Australia. It concludes that a clear public interest case to issue a retail CBDC has yet to emerge, as Australians are generally well served by the capabilities and resilience of the current retail payments system. However, the report highlights the role that wholesale CBDC, alongside other forms of digital money and infrastructure upgrades, could play in enhancing the functioning of wholesale markets. Hence, the report also sets out a three-year roadmap for future work on digital money in Australia, including Project Acacia, which will explore opportunities to uplift the efficiency, transparency and resilience of wholesale markets through tokenization and new settlement infrastructure.

The National Australia Bank (NAB) aims to launch an Australian dollar-pegged stablecoin (AUDN) in the middle of 2023. Its purpose would be to allow its customers to settle transactions in real-time using Australian dollars, and several other purposes including "carbon credit trading, overseas money transfers and repurchase agreements." The stablecoin will launch on the Ethereum and Algorand blockchains. NAB is the second major Australian bank to be involved in the creation of a stablecoin. Earlier, Australia and New Zealand Banking Group (ANZ) teamed up with crypto custodian Fireblocks to mint a stablecoin pegged to the Australian dollar.

The Reserve Bank of Australia (RBA) published a paper that explores the merits of introducing a retail central bank digital currency (CBDC) in Australia, focusing on the extent to which consumers would value having access to a digital form of money that is even safer and potentially more private than commercial bank deposits. The results suggest that the average consumer attaches no value to the added safety of a CBDC. This is consistent with bank deposits in Australia already being perceived as a safe form of money, and physical cash issued by the RBA continuing to be available as an alternative option. Privacy settings of a CBDC, which can take various forms, look more consequential for the CBDC value proposition. However, no clear relationship was found between safety or privacy valuations and the degree of consumers' cash use.

Members of the Reserve Bank of Australia (RBA) Payment Systems Board discussed the increasing interest in central bank digital currency (CBDC) internationally and in Australia. Many see an increased likelihood of issuing some form of CBDC in the future, especially to support wholesale transactions.

Mastercard has completed a central bank digital currency (CBDC) proof-of-concept (PoC) with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre. (The MasterCard press release calls it a "pilot" but it's unclear whether live users were involved, a requirement for the "pilot" label.) It tested how authorized parties, who have gone through know-your-customer (KYC) protocols, could hold, use and redeem CBDCs. In addition, the project tested how a holder could purchase an Ethereum-based nohttps://www.mastercard.com/news/ap/en/newsroom/press-releases/en/2023/mastercard-demonstrates-interoperable-cbdc-for-trusted-web3-commerce-in-australia-and-beyond/n-fungible token (NFT) by locking the pilot CBDC and minting an equivalent amount of Ethereum-based wrapped coins.

Reserve Bank of Australia (RBA) Assistant Governor Brad Jones discussed where the case for a retail CBDC in Australia fits into the wider international debate over the future of money, and provided an update on the RBI's retail CBDC pilot project. On balance, the RBA does not yet see a case for issuing an eAUD, but the central bank is "keeping an open mind" as its eAUD pilot program remains in full swing. The program has not prescribed use cases in advance, instead inviting the applicants (80 of them) to propose their own use cases (140), from which the RBA eAUD project team will select to take forward into the pilot phase in early 2023.

The Reserve Bank of Australia (RBA) published an article that examines the value of banknotes used for each component of cash demand and how it has changed since the COVID-19 pandemic. The estimated share of banknotes used for transactions in Australia has declined by around 5 percentage points since early 2020. We estimate that of all the banknotes currently in circulation, 9-26% are used for transactional purposes, 5-9% are lost, 7-11% are used in the shadow economy, and 55-80% are hoarded domestically or internationally.

The Reserve Bank of Australia Payments System Board continues to be of the view that there is not a strong public policy case at present for issuance of a retail CBDC in Australia. However, the Bank is continuing its collaborative research project on a wholesale CBDC with a number of external parties.

The Reserve Bank of Australia is partnering with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software, a blockchain technology company, on a collaborative project to explore the potential use and implications of wholesale central bank digital currency (CBDC) using distributed ledger technology (DLT). A proof-of-concept (POC) will be used to explore the implications of atomic delivery-versus-payment and other potential programmability and automation features of tokenised CBDC and financial assets. It will start by funding, settling and repaying tokenised syndicated loans on an Ethereum-based platform.

The Reserve Bank of Australia still considers that at present there is not a strong public-policy case for central bank digital currency (CBDC) issuance, given that the electronic payments system in Australia compares very favourably with those in many other countries and access to cash remains good. Nonetheless, they will continue to closely watch the experience of other jurisdictions. They are also continuing to research the technological and policy implications of a wholesale form of CBDC and work to develop a proof-of-concept with external parties to explore aspects of wholesale CBDC, building on research they did in their Innovation Lab last year.

The Reserve Bank of Australia has posted a job advertisement for multiple positions within its new central bank digital currency (CBDC) research team. The cross-disciplinary team is researching "whether there is a case for a CBDC in Australia, and if so, how it might be designed and what benefits and other implications it would have."

Tony Richards, Head of Payments Policy at the Reserve Bank of Australia (RBA) revealed that RBA staff are still not convinced that a strong policy case has emerged in Australia for a retail CBDC. Australia's existing electronic payments system already provides households and businesses with a wide range of safe, convenient and low-cost payment services. Also, much (if not all) of the innovation and new functionality that could potentially be enabled by a CBDC could in principle also be enabled by innovation based around commercial bank deposit accounts, e-money or stablecoins. But given the possibility that the balance could shift towards a case for issuance of retail CBDCs, the RBA has been stepping up its CBDC research.

The Reserve Bank of Australia (RBA) has launched a research project to explore use cases for a CBDC in Australia. It is expected to take about a year to complete, and will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time. Interested industry participants will be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses. The Bank and the DFCRC will then select a range of different use cases to participate in the pilot, based on their potential to provide insights into the possible benefits of a CBDC.

Australia's Treasury announced plans to introduce a comprehensive licensing regime for crypto exchanges designed to enhance consumer protection, bring clarity to the digital asset sector, and pave the way for the nation to align with global regulatory standards. Under the proposed framework, crypto exchanges operating in Australia will have to obtain an Australian Financial Services license (AFSL) from the Australian Securities and Investments Commission (ASIC). This regulatory measure will be applicable to exchanges that hold more than AUD 1,500 of any single client's assets or have total assets exceeding AUD 5 million. https://treasury.gov.au/sites/default/files/2023-10/c2023-427004-proposal-paper-final.pdf

The Australian government Treasury released a consultation paper, defining cryptocurrencies and outlining its plans to license crypto-asset secondary service providers (CASSPrs) and set out crypto custody requirements. This regime would be separate from the existing Australia Financial Services (AFS) licensing, but CASSPrs, but entities operating as brokers - by forwarding clients' orders to a third-party exchange for execution - would be licensed under the AFS licensing regime and comply with the associated obligations.

The Reserve Bank of Australia (RBA) and Digital Finance Cooperative Research Centre (DFCRC) announced 14 use case proposals, along with their providers, that will participate in RBA/DFCRC central bank digital currency (CBDC) pilots. The cases include offline payments, tax automation and a CBDC for "trusted Web3 commerce," with participants ranging from banks - such as Commonwealth Bank and Australia and New Zealand (ANZ) bank - to payment providers like Mastercard. According to the September 2022 RBA white paper, use case end users will be selected by the use case providers. A report on the project is expected to be published around the middle of the year.

The Reserve Bank of Australia (RBA) published a paper on Australians' cash usage. It finds that the use of cash for day-to-day transactions continues to decline. Although the acceptance of cash by merchants remains at a high level, it is a little lower than prior to the pandemic. Nevertheless, some communities, particularly in rural areas, are increasingly susceptible to a decline in cash access if there were to be further removal of cash access points. Furthermore, many merchants indicated plans to discourage cash payments at some point in the future. 

The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) published a consultation paper which seeks industry feedback on a new research initiative, Project Acacia. This project will explore how different forms of digital money and associated infrastructure could support the development of wholesale tokenized asset markets in Australia. The consultation paper seeks expressions of interest from industry in participating in an experimental research phase for Project Acacia, and in joining an Industry Advisory Group for the project. Input is also sought on the technical and functional capabilities of new forms of settlement infrastructure and digital money, including wholesale central bank digital currency (#CBDC) and tokenized bank deposits, that could promote well-functioning tokenized asset markets and stability in the financial system.

This paper by a Reserve Bank of Australia (RBA) staffer sheds light on Australia's fast real-time retail payments system, the New Payments Platform (NPP). It concludes that there is no strong case for the RBA to issue a retail central bank digital currency given that the NPP and the safer Next Generation Banknote series.

While CBDC technical feasibility is not yet established, this Reserve Bank of Australia paper considers some issues around its possible design, the possible rationales for issuance, and the implications of issuance. It concludes that, given the likely benefits and risks, at present there does not seem to be a strong public policy case for issuance in Australia. Nonetheless, it will be important to closely watch the experience of other jurisdictions that are considering implementing CBDC projects.