Australia prioritises wholesale CBDC over retail version

Australia’s central bank, the Reserve Bank of Australia (RBA), has shifted its focus towards developing a wholesale central bank digital currency (CBDC), citing fewer challenges and greater benefits compared to a retail CBDC. Assistant Governor Brad Jones, in a speech on 18 September, emphasised that a wholesale CBDC would serve as an evolutionary upgrade to existing financial systems rather than a revolutionary change. This type of CBDC is expected to enhance Australia’s financial infrastructure by leveraging new technologies such as programmability and atomic settlement.

The RBA is launching a three-year research initiative to explore the potential of wholesale CBDC and tokenised commercial bank deposits. Jones highlighted the central bank’s collaboration with industry leaders to assess the viability of these innovations and their ability to streamline the nation’s financial markets. Meanwhile, the benefits of a retail CBDC remain uncertain, with Jones stating that such a shift could introduce significant challenges to the current financial landscape.

Although the RBA remains open to considering a retail CBDC in the future, any decision would require legislative changes and government approval. As Jones pointed out, the Australian Government would ultimately be responsible for determining whether to introduce a retail CBDC, in line with international practices.