The Reserve Bank of Australia (RBA) has expressed interest in embracing a central bank digital currency (CBDC) as a pivotal instrument for future monetary transactions. This was revealed in a speech by Brad Jones, the RBA’s Assistant Governor for the financial system.
During his speech titled, “A Tokenised Future for the Australian Financial System”, Jones delved into the evolution of monetary systems, highlighting the transition from tangible to digital forms of money. Particularly, he discussed the prominence of tokenized assets and money in today’s digital ecosystem.
Stablecoins, backed by high-grade assets like government securities and central bank reserves, could play a vital role in settling tokenized transactions, according to Jones. However, he emphasized the importance of stringent regulatory frameworks, cautioning against the potential risks associated with privately issued stablecoins.
CBDCs, especially those representing tokenized bank deposits, are being seen in a favorable light by the central bank. Jones stated that this shift isn’t drastic, as bank deposits are currently exchanged and settled across the central bank’s balance sheet. Transactions made using tokenized deposits would still culminate in a transfer of balances between the parties’ banks.
The RBA’s recent pilot program on CBDCs also unearthed several benefits of integrating this digital currency into wholesale payment systems. One notable advantage is the seamless settlement in tokenized asset markets. Furthermore, CBDCs might work in tandem with emerging digital money forms, including tokenized bank deposits and asset-backed stablecoins.
In a nutshell, as digital finance gains traction, the RBA is actively exploring the potential of CBDCs as a robust and reliable transaction medium.
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