The reason for this step was shown to provide more economic benefits and less difficulties compared to retail CBDC. The RBA sees wholesale CBDC as a more beneficial and viable solution for the country’s financial system.

Speaking at a conference on September 18, RBA deputy governor Brad Jones explained the rationale behind the bank’s focus on wholesale CBDC. Jones described the wholesale CBDC as a significant addition to existing monetary systems, noting that it is an “evolutionary, not revolutionary” development.

He stated that wholesale CBDC could better fit into existing financial infrastructure, especially in the context of systemically important markets. In this context, it was emphasized that wholesale CBDC carries less risk for Australia’s financial system and offers greater economic benefits.

While emphasizing the Reserve Bank of Australia’s determination to develop wholesale CBDC, Jones announced that they have launched a three-year research initiative towards this goal. The main aim of the research is to examine how digital currencies and tokenized commercial bank deposits can be better integrated.

He stated that in this process, they plan to cooperate with the industry and aim to explore new ledger technologies. In particular, the potential impacts of concepts such as programmability and atomic settlement on Australia’s financial infrastructure will be explored.

These technologies are thought to have the potential to increase the efficiency of the financial system and make transactions safer and faster.

When it comes to retail CBDC, the RBA’s stance in this area is more cautious. Jones noted that retail CBDC currently offers fewer benefits for Australia and its implementation could pose significant challenges.

He stated that retail CBDC would create a “significant change” to the country’s current financial regulations and that the benefits of such a system are “modest or uncertain at this time.”

The RBA believes that the arguments supporting retail CBDC internationally are not fully applicable to Australia. Therefore, considering the potential problems that retail CBDC will bring, the RBA’s interest in this area has remained limited for now.

Jones also emphasized that a public policy justification is needed for the implementation of retail CBDC. He stated that such a change could only be decided by the Australian government.

Jones pointed out that legislative changes are required to implement retail CBDC and the importance of close cooperation with the Treasury and other relevant government bodies in this process. This shows that moving forward in line with international norms is critical for Australia.

While the Reserve Bank of Australia currently prefers to focus on wholesale CBDC, it is open to exploring retail CBDC in the future but is taking a cautious approach in this area.

It is thought that wholesale CBDC can be better integrated into existing systems and provide greater economic benefits. However, the viability of a retail CBDC remains unclear for now due to its implications for Australia’s existing financial regulations.