Australia’s Central Bank Outlines 3 Years Roadmap for Wholesale CBDC

As a seasoned analyst with over two decades of experience in the financial sector, I find the RBA’s strategic commitment to wholesale CBDC both intriguing and prudent. The focus on wholesale solutions, as opposed to retail ones, aligns with global trends, demonstrating Australia’s forward-thinking approach to digital currency innovation.


The Australian Reserve Bank (RBA) has revealed a three-year initiative to develop a digital currency for large financial transactions, known as a central bank digital currency (CBDC). During the Intersekt Fintech Conference in Melbourne on September 18, 2024, Assistant Governor Brad Jones explained their key objectives. He highlighted that the main focus would be on wholesale CBDCs, with retail options potentially explored later.

Brad Jones stated that the Reserve Bank of Australia (RBA) is indeed focusing more on developing wholesale digital currency and related infrastructure, such as wholesale Central Bank Digital Currency (CBDC), over a retail CBDC in their strategic priorities.

RBA’s Commitment to Wholesale CBDC

It’s been made clear that the Reserve Bank of Australia (RBA) is concentrating on wholesale Central Bank Digital Currencies (CBDCs) due to their distinct advantages for financial institutions. Unlike retail CBDCs, which have limited application for the general public, wholesale CBDCs are designed to minimize risks, increase liquidity, and decrease expenses related to compliance and intermediaries.

As an analyst, I too acknowledge that retail Central Bank Digital Currencies (CBDCs) carry certain risks such as facilitating bank runs and raising borrowing costs. Given these apprehensions, the Reserve Bank of Australia (RBA) has opted to focus on wholesale CBDCs initially. Their ongoing project, Project Acacia, is designed to reinforce our financial system by exploring tokenized commercial bank deposits and investigating international applications.

Project Acacia encompasses not only local enhancements but also collaborates with regional central banks to progress blockchain and smart contract technologies. By doing so, the Reserve Bank of Australia (RBA) aims to establish a more transparent and efficient system for institutional markets. Jones emphasized the potential of smart contracts to revolutionize the transfer of funds and assets within a common platform, a key area of interest for the RBA’s research group.

Although Jones mentioned that the RBA hasn’t fully ruled out retail CBDCs, the focus remains on wholesale solutions. This focus aligns with the global trend, where 134 countries are researching digital currencies, with 66 already in advanced stages.

What Lies Ahead for CBDC Adoption?

The Reserve Bank of Australia (RBA) is pushing ahead with ideas for a central bank-issued digital currency intended for use among wholesale institutions, but it’s proceeding with caution regarding consumer-focused versions. By the year 2027, the RBA may reassess the potential adoption of retail CBDCs, as implementing them would necessitate new legal frameworks.

1) The bank plans to solicit public feedback and delve deeper into the concept of asset tokenization, both crucial components of this project. By adopting a cautious approach, Australia can spearhead advancements in digital currency technology whilst mitigating potential threats to its financial security.

By embarking on a three-year initiative to develop a Central Bank Digital Currency (CBDC) for wholesale use, Australia positions itself as a leader in shaping the future of digital currencies, especially within institutional markets and central banking sectors. This deliberate strategy by the Reserve Bank of Australia (RBA) is intended to enhance the efficiency of the financial system, and could eventually open doors for retail CBDCs in the future.

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2024-09-18 11:17