Australia Finds No ‘Clear Public Interest’ for Retail CBDC

If Australia creates a digital currency, it will likely be the wholesale, not retail, variety.

That’s according to a report issued Wednesday (Sept. 18) by the country’s central bank, arguing that “a clear public interest case” for issuing a retail central bank digital currency (CBDC) in Australia has yet to be found.

“This assessment is partly informed by the observation that Australians are generally well served by the capabilities and resilience of the current retail payments system,” the report said. “In jurisdictions that have issued a retail CBDC or indicated that it is quite possible in coming years, the main motivations have less resonance in Australia.”

A retail CBDC would be a digital currency used by the general public, while a wholesale version would be used by banks and other financial institutions. The Reserve Bank of Australia (RBA) also notes that its assessment could change as the costs and benefits are better understood.

“At the present time, we assess the potential benefits as more promising, and the challenges less problematic, for wholesale CBDC compared to a retail CBDC,” said Brad Jones, the central bank’s assistant governor.

“Next month, we will launch the public phase of Project Acacia, which will explore opportunities to uplift the efficiency, transparency and resilience of wholesale markets through tokenization and new settlement infrastructure.”

The CBA had said last year that a CBDC for Australia was likely “some years away,” as the country’s payments system was already meeting the needs of users and work on digital currencies in most advanced economies was “still in an exploratory stage.”

The central bank’s latest report comes on the heels of new research this week showing that 134 countries are exploring CBDCS. Those countries make up 98% of the global economy, according to findings by think tank Atlantic Council.

The newest data show that all G20 countries are exploring CBDCs, with 44 countries piloting the digital currencies, compared to 36 nations in 2023. The think tank’s report shows that three countries have launched CDBCs (the Bahamas, Jamaica and Nigeria), while two countries explored digital currencies before canceling them: Ecuador and Senegal.

“There has been a narrative that the countries that have launched CBDCs have seen low or no usage, but in the last months we have seen a real uptake,” the council’s Josh Lipsky told Reuters, while also predicting that the People’s Bank of China “will be close to full launch a year from now.”