Despite stating last month that there is no need for a central bank digital currency, the Reserve Bank of Australia is still looking into the possibility of creating one.
Speaking at the University of Western Australia Blockchain, Cryptocurrency and Fintech Conference, Tony Richards — the Head of Payments Policy at the RBA — revealed that the RBA is not only looking into the possibility of a retail CBDC.
In fact, the RBA is also conducting research on the technological and policy implications of a wholesale CBDC which would be used only by a small group of financial entities.
“We will be continuing to consider the case for a CBDC, including how it might be designed, the potential benefits and policy implications, and the conditions in which significant demand for a CBDC might emerge.”
Research Into Centralized Digital Ledgers
The vast majority of blockchains are public, decentralized, and transparent — however, this may not be the case for the central bank digital currency the RBA is taking into consideration.
If the RBA were to create its own digital currency, it would probably run on a permissioned, centralized model — a wise precaution, since a small development error would affect millions of citizens with possibly unforeseen consequences.
Tony Richards also revealed that if an official CBDC were to be made, it may run on an account-based system — and might be available offline too — possibly by implementing a cold wallet system.
Central banks worldwide are also looking into CBDCs and whether it would make sense to issue a tokenized version of their national currencies. China has probably gone the farthest with its possible national blockchain and is currently in the testing phase for a digital yuan. This test will be carried out by giving 10 million CNY (over AUD 2 million) in digital currency to Shenzhen residents.
Other nations, like the U.S.A., are still trying to decide whether a CBDC is even necessary.
For the moment, however, the RBA is not committed to launching a blockchain-based digital currency — and there is no guarantee that they will ever do so.