Australia’s RBA to prioritise wholesale CBDC work over retail

Australia’s central bank, the Reserve Bank of Australia (RBA), has decided to focus on the development of a wholesale central bank digital currency (CBDC) over a retail version. The RBA believes that the economic benefits of a wholesale CBDC outweigh those of a retail CBDC. Assistant Governor Brad Jones announced the launch of a three-year digital money work plan called Project Acacia, which aims to improve the efficiency, transparency, and resilience of wholesale markets. The project will explore opportunities to use tokenized money and new settlement infrastructure. The RBA also mentioned the possibility of future cross-border applications with regional central banks. While the RBA and Treasury will continue to assess the merits of a retail CBDC, their current assessment is that the potential benefits appear modest or uncertain compared to the challenges it would bring. A follow-up paper on the retail CBDC will be published in 2027. The benefits of a wholesale CBDC include reducing risks, increasing transparency and auditability, and reducing costs for institutions and customers. The trend of exploring digital currencies is not unique to Australia, as research by the Atlantic Council think-tank revealed that 134 countries, representing 98% of the global economy, are now exploring digital versions of their currencies.