Today at the UWA Blockchain and Cryptocurrency Conference, the Head of Payments Policy at the Reserve Bank of Australia, Tony Richards, confirmed the Bank has no plans to issue a retail central bank digital currency (CBDC) just yet. Instead, the Bank will continue with research into decentralized ledger technology (DLT) and its uses.
Richards differentiated CBDCs from other digital forms of payment. He described a CBDC as a “digital alternative to cash.” That contrasts with e-money, which is stored electronically, such as with Paypal. Then there are cryptocurrencies, which use DLT and are private money not issued by a sovereign issuer. And finally, there are stablecoins which aim to have a stable value.
In terms of the rationale for issuing a CBDC, Richards points out that citizens rely on physical money for financial inclusion in some jurisdictions as many do not have access to bank accounts or digital payment systems. Small developing countries in particular look to CBDCs for financial inclusion. On the other hand, the majority of Australian citizens have access to traditional and digital bank accounts.
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