The Reserve Bank will pilot a type of digital cash subsequent 12 months however stays unconvinced that Australia wants it.
“Our project team is in the process of selecting a number of proposed eAUD use cases to take forward into the pilot phase early next year,” Assistant Governor Brad Jones instructed a digital finance convention.
As far as financial economics goes, the introduction of a normal goal central financial institution digital foreign money can be revolutionary, he mentioned on Thursday.
“A strong public interest case would first need to emerge. On balance, we have yet to see that case made in Australia,” he mentioned.
Dr Jones mentioned the RBA was not alone, as no different superior financial system central financial institution has dedicated to issuing a normal goal CBDC.
“But with our eAUD pilot program in full swing, and changes in the digital economy and money and payments landscape occurring at a frenetic pace, the bank is keeping an open mind,” he mentioned.
Recent excessive climate occasions in Australia are a reminder that digital and bodily money distribution networks will be severely disrupted, Dr Jones mentioned.
And cyber disruptions signify a common danger from which Australia just isn’t immune, he instructed the Central Bank Conference on the Microstructure of Financial Markets in Sydney.
He mentioned digital cash might assist when digital communication and energy networks are disrupted.
It might additionally scale back the price of settling transactions throughout borders, and enhance competitors by together with extra non-banks in companies.
But a wholesale digital coin used between banks would imply much less change to the established order.
“One distinct possibility is that the next few years prove to be more evolutionary than revolutionary,” Dr Jones mentioned.
Building on the function that trade settlement balances already play within the Australian monetary system, he mentioned it appears a smaller leap to think about {that a} wholesale CBDC would flow into forward of a normal goal selection.
In some low-income international locations the place many households and small companies are “unbanked” as a result of there are not any companies accessible, a key motivation for issuing a CBDC has been to strengthen monetary inclusion.
“But, in Australia, a very small proportion of households are without access to banking and payment services, and it is not obvious how a CBDC would bring them into the fold,” he mentioned.
Some international locations argue a digital coin would assist the place banknotes are laborious to entry or sparingly used.
But bodily money in Australia is accessible and nonetheless seems valued by households as a helpful backup for digital funds and as a retailer of wealth, he mentioned.
The central financial institution’s undertaking with the Digital Finance Cooperative Research Centre is exploring how digital cash is perhaps used, constructing on the RBA’s earlier proof-of-concept work.
