As other nations are rushing to launch central bank backed digital currency dubbed CBDC, Australia is not joining the bandwagon.
As per the Australian local news platforms, the Reserve Bank of Australia recent payments paper indicates that the bank is taking a cautious stand when it comes to CBDCs and privately issued stablecoins.
According to the australian central bank, there is no urgent case or need to introduce a CBDC in the country. The regulator argues that the country has an efficient, real-time payment platform which eliminates the need of a CBDC.
In addition, the regulator notes that the use of cash for transactions is decreasing in the country as Australian citizens are getting rid of banknotes just like in other countries like Sweden.
According to the central bank, despite the COVID-19 crisis in the country, the demand for cash has gone up. In this regard, RBA has committed to continue making it easy for Australians to access banknotes “for as long as Australians wish to keep using them.”
The Reserves Bank’s paper also explored the projects being carried in China, Sweden and Canada – some of the countries which have taken the CBDC initiatives proactively.
When it comes to Sweden, the RBA says that the country has witnessed a significant decrease in the use of cash for a number of years hence the need for Riksbank to come up and test the use of e-krona.
In Canada’s case, the country’s central bank has been preparing itself to provide CBDC when the opportune time comes. The Canadian central bank has envisioned two scenarios when CBDC can be beneficial – a collapse in use of fiat money for normal transactions as well as a threat to the country’s monetary policy as a result of growth and development of privately issued digital money.
The RBA’s report also touches on Facebook’s Libra stating that it still remains a dream and is following closely on whether it be granted regulatory approval to operate in various jurisdictions.
The Australian central bank also opined that the Chinese CBDC project which is at an advanced stage is largely informed by the popularity of private-sector e-money wallets like WeChat and Alipay.