Australia’s central bank is shifting its focus to developing a wholesale central bank digital currency (CBDC), as it believes the economic advantages outweigh those of a retail CBDC, according to a senior official.
During a recent conference, Brad Jones, Assistant Governor of the Reserve Bank of Australia (RBA), introduced a three-year initiative known as Project Acacia. This joint effort between the RBA and the Treasury aims to explore opportunities for enhancing wholesale market efficiency, transparency, and resilience through the use of tokenized money and modern settlement infrastructure.
Future stages of the project may expand into cross-border applications, potentially involving collaboration with other central banks in the region.
While the RBA will continue to evaluate the potential of a retail CBDC, any decision to implement one would be up to the Australian government and would likely require legislative changes. A follow-up report is expected in 2027 to reassess the merits of a retail version.
Jones emphasized that the current benefits of a retail CBDC are unclear and might not outweigh the challenges it presents. In contrast, a wholesale CBDC could offer significant benefits, such as lowering counterparty risks, improving transparency, freeing up collateral, and reducing costs for financial institutions and their customers.
Globally, over 130 countries, representing 98% of the global economy, are exploring the possibility of launching their own digital currencies, as highlighted by a recent study from the U.S.-based Atlantic Council think-tank.
