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Australia sees greater benefits in wholesale CBDC, limits retail interest

Australia’s central bank has announced a shift toward wholesale CBDC development, citing greater economic benefits and fewer challenges compared to a retail version.

The Reserve Bank of Australia seems to be prioritizing wholesale CBDC development over retail, citing greater economic benefits and fewer challenges for the country’s financial system.

In a Sept. 18 conference speech, RBA assistant governor Brad Jones emphasized the RBA’s focus on wholesale CBDC, viewing it as an “evolutionary than revolutionary” addition to the existing monetary systems, particularly in the context of systemically important markets.

“[…] unlike a retail CBDC that would be issued for use among the public, a wholesale CBDC would represent more an evolution than revolution in our monetary arrangements.”

Brad Jones

To prioritize a whole CBDC, Jones announced a three-year research initiative into digital money, with immediate plans to collaborate with industry on this type of central bank digital currency and tokenized commercial bank deposits. The central bank official says the project will explore new ledger technologies and concepts such as programmability and atomic settlement to assess potential gains for Australia‘s financial infrastructure.


Australia sees greater benefits in wholesale CBDC, limits retail interest - 1
Type of cash payments by country since 2010 | Source: The Reserve Bank of Australia

In contrast, the RBA views the benefits of a retail CBDC as “modest or uncertain at the present time,” citing that it would represent a “significant change” to Australia’s financial arrangements. Jones highlighted that many of the international arguments in favor of retail CBDCs are either less relevant to Australia or “uncertain at the present time, relative to the challenges it would introduce.”

While the RBA remains open to exploring retail CBDC in the future, Jones indicated that any move in that direction would require a public policy case and “legislative change,” aligning with international norms. “As such, the Australian Government would ultimately decide whether to introduce a retail CBDC,” he said, underscoring the need for close coordination with Treasury and other government bodies.

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