Today the Reserve Bank of Australia and the Australian Treasury published a report on work done so far on central bank digital currency (CBDC). As stated previously, they see no immediate need for a retail CBDC, despite the Australian cash transactions (13%) as a proportion of retail payments nearing Scandinavian levels. Nonetheless, they plan to continue to explore it, especially from a policy point of view. However, they concluded that a wholesale CBDC (wCBDC) is less of a paradigm shift and could potentially support massive savings through asset tokenization.
Previously the Reserve Bank ran extensive CBDC experiments with the Digital Finance Cooperative Research Centre (DFCRC) for both wholesale and retail CBDC. Today the central bank revealed that the work is progressing on the wholesale front with Project Acacia, to support asset tokenization and potentially tokenized deposits.
The report describes Acacia as addressing the question of “whether there is a need for a new form of tokenised central bank money in the form of a wholesale CBDC to maximise the benefits from asset tokenisation, or whether there are enhancements to existing infrastructure that could support settlement using ESA (reserve) balances, perhaps complemented by privately issued tokenised money such as tokenised deposits.”
Previous Australian research estimated tokenization savings of A$1-4 billion ($2.7bn) in transaction costs and up to A$13 billion ($8.9bn) for issuers annually.
Project Acacia may explore cross border payments in the future. The DFCRC will publish an Acacia consultation paper in October and invite industry engagement. The initiative will run through to the second half of 2025.
Beyond wholesale, the roadmap includes the creation of CBDC academic advisory forums, enhancing regulatory sandboxes and conducting workshops. In 2027 the central bank and Treasury will publish another report on retail CBDC to share their findings.
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