CANBERRA, Australia—Australia’s new central bank governor has expressed support for a wholesale central bank digital currency (CBDC) over a retail version, with one report saying the plan points to the successes gleaned from recent case studies.
New Reserve Bank of Australia (RBA) Gov. Michele Bullock stated that the CBDC experiment yielded several positives for the country’s payment system. Bullock cited the use cases in cattle auctions but is “still not convinced on the retail CBDC side,” CoinGeek reported.
‘Heightened Risks’
According to the report, although Bullock did not delve into the downsides of a retail CBDC offering, “experts have pointed to the heightened risks of bank disintermediation that could affect commercial banks’ profitability.”
Others have argued that the “domestic payment system in Australia is advanced to provide the perks of financial inclusion and competitive transaction fees,” CoinGeek added.
Bullock, appointed RBA governor in September, 2023, is backing a wholesale CBDC that will improve interbank settlements. The new RBA governor has considerable experience with wholesale CBDCs from leading Project Atom, the central bank’s Proof-of-Concept (PoC) for asset tokenization, CoinGeek said.
A Close Eye
Rather than discard a retail CBDC offering, the new RBA governor confirmed that the central bank will closely monitor their developments in other jurisdictions.
“I know other countries are looking at retail CBDC and will continue to keep in touch with that but that’s probably not our main focus for the next little while,” Bullock said.
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