The Payments System Board of the Reserve Bank of Australia (RBA) has found no strong public policy-case to issue a central bank digital currency (CBDC) despite the trend of declining cash-use throughout the COVID-19 pandemic.
A meeting of the Reserve Bank of Australia’s Payments System Boards was held today, to discuss the impact of the COVID-19 pandemic on the Australian payments ecosystem and the subject of issuing a CBDC, among other issues.
According to RBA release on Aug 21, Australian payments systems operators and retail payments have proven resilient throughout the COVID-19 pandemic disruption to the economy as have financial markets infrastructures. High on the RBA’s discussion was the declining uses of physical cash and the potential of a central bank digital currency.
Reserve Bank of Australia Deems CBDC Unnecessary
Digital payments services have come to the forefront for economies globally as the disruption of the highly infectious COVID-19 virus has led to decreasing use of physical cash.
Like the United States and China, as well as a host of other nations—Australia has floated the idea of a central bank digital currency or the e-AUD. However, discussions in the meeting of the RBA’s Payments System Board concluded that there was not a strong enough case for a retail central bank digital currency given the competitiveness of Australia’s current cashless systems.
Per the Reserve Bank of Australia’s announcement:
“Consistent with previous discussions, members considered that at present there is not a strong public-policy case for issuance in Australia, given that the electronic payments system in Australia compares very favorably with those in many other countries and access to cash remains good.”
The Payments System Board will continue to monitor the global payments ecosystem and continue research on the CBDC technology and policy.
The meeting reports said:
“The Board will continue to closely watch the experience of other jurisdictions. The Bank is continuing to research the technological and policy implications of a wholesale form of CBDC and is working to develop a proof-of-concept with external parties to explore aspects of wholesale CBDC, building on research the Bank did in its Innovation Lab last year.”
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