Australia hails CBDCs as the ‘future of money,’ more inside

• Australia intends to collaborate with other institutions to create a CBDC program for wholesale usage.
• Brad Jones, assistant governor at the Reserve Bank of Australia, made these remarks in a recent speech.

Australia has expressed the possibility of exploring central bank digital currency (CBDC) as the “future of money.”

On 16 October, Brad Jones, assistant governor (financial system) at the Reserve Bank of Australia (RBA), gave

a speech titled “A Tokenised Future for the Australian Financial System” at the Australian Financial Review Cryptocurrency Summit.

During the speech, Jones talked about the opportunities and challenges presented by the tokenization of assets. He also discussed the suggested plan to use CBDCs as a “form of money.”

Jones added that stablecoins, issued by regulated financial institutions and backed by high-quality assets, are a viable option to settle tokenized transactions. However, stablecoins issued by private parties carry additional risks due to lack of regulatory guidelines.

During the address, the assistant governor outlined the evolution of money and financial instruments throughout history.

Jones went on to suggest that implementing tokenized bank deposits would signal a minor change from existing practices.

What does the CBDC pilot tell?

Jones also shared some findings from the central bank’s pilot CBDC program findings. These include a wide range of areas where CBDC could offer value in wholesale payments or facilitate atomic settlement in tokenized asset markets.

The CBDC pilot highlighted the possibility of a synergistic link between a wholesale CBDC and emerging types of privately issued digital currencies. These include tokenized bank deposits and asset-backed stablecoins.

Australia’s central bank is still assessing the early-stage implementation of CBDCs. Jones’ speech emphasized the country’s desire to explore innovative fintech solutions.

The assistant governor further indicated that the central bank intends to create a CBDC program for wholesale usage in collaboration with other central banks and international institutions.