Although the RBA believes that the case for issuing a central bank digital currency (CBDC) to households has not been made out, it has nevertheless considered the possibility of issuing a CBDC for market participants. wholesale market in specialized payment and settlement systems.
The RBA’s proposed CBDC would be a form of stable currency, denominated in the sovereign currency and convertible at par with other forms of currency.
The RBA noted a number of potential benefits, including increased speed and robustness of payments and the possibility of creating a “programmable currency” – that is, a digital currency with conditions linked to the way in which it can be spent or transferred. A CBDC could also create “atomic transactions,” in which all parts of a transaction are executed or none are executed, further reducing settlement risk.
The RBA also revealed that it had developed a proof of concept of a wholesale settlement system running on a private, permissioned Ethereum network.
The proof of concept simulated the issuance of central bank-backed tokens to commercial banks in exchange for foreign exchange settlement account balances, the exchange of these tokens between commercial banks, and their eventual repurchase from the central bank.
The RBA plans to extend the research with one or more external partners.
