Australia Central Bank Shifts Focus to Wholesale CBDC

Reserve Bank of Australia sees greater economic benefits and fewer challenges with wholesale digital currency over retail version.

The Reserve Bank of Australia (RBA) will prioritize developing a wholesale central bank digital currency (CBDC) instead of a retail version.
Assistant Governor Brad Jones highlighted that wholesale CBDCs offer more promising benefits and fewer challenges compared to retail CBDCs.
The RBA has launched a three-year research initiative called Project Acacia to explore digital money's future, focusing on tokenized assets and new settlement infrastructure.
A retail CBDC would require legislative changes and presents issues such as high borrowing costs and increased risk of bank runs.
The RBA remains open to reassessing the potential of a retail CBDC in the future, with further research and public engagement planned for 2025 and a follow-up paper in 2027.