Aussie money ‘already digital’

Blockchain, bitcoin and stablecoin champions still cannot count the Reserve Bank of Australia as a fan.

The RBA is more an interested bystander of what will be an ever longer running debate over central bank-endorsed electronic or digital money.

More than 99.5 per cent of money in Australia now is digital, given the $8 billion in banknotes genuinely in circulation and a broad money level of $2.36 trillion in July.

In any event, partly because most central banks are doing a little or a lot about to consider the issue, and mostly to pacify the eAUD end of the fintech market, the RBA yesterday outlined plenty of thinking and analysis on the state of play.

Central bank digital currency – CBDC – is the acronym of choice.

In a paper in its quarterly Bulletin, the RBA considers some issues around possible designs, the rationales for issuance, and the implications of issuance.

“Given the likely benefits and risks, at present there does not seem to be a strong public policy case for issuance in Australia,” the RBA concludes. Read that as none.

“Even though the use of cash for transactions is declining, cash is still widely available and accepted as a means of payment,” the RBA point out.

‘Households and businesses are also well served by a modern, resilient payment system that has undergone significant innovation in recent years, including the introduction of the New Payments Platform.”

If in the years ahead the RBAs’ thinking shifted, “the costs and project management difficulties of making a CBDC a reality would “would be a major, multi-year project for the central bank, the payments industry, their technology partners, and a wide range of stakeholders in the public and private sectors.

“It would be costly in financial terms and quite risky from both a financial and technology perspective.”

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