Reserve Bank of Australia Setback In CBDC Development Could Delay Future Rollout
Australia had been contemplating the introduction of a central bank digital currency (CBDC). However, reports of setbacks during the pilot phase have prompted a reconsideration of this plan.
The Reserve Bank of Australia (RBA) has officially stated that it will defer any decisions regarding a CBDC for a number of years. This delay is attributed to unresolved issues that emerged towards the conclusion of the pilot project, which was initiated by the institution.
The focus of the Central Bank’s final deliberations centered on the imperative to conduct further comprehensive research. This research would encompass legal, regulatory, technical, and operational aspects. The necessity for cryptographic keys to facilitate actions on the CBDC pilot platform was highlighted. However, finding feasible and adequately secure solutions for key management proved to be a challenge, particularly for enterprises lacking the capacity to operate within elite networks.
Furthermore, integrating such a pilot platform with industry use case applications presented a considerable challenge. This challenge, in turn, had implications for potential implementation models. Design decisions crucial to effectively support a spectrum of privacy requirements and data exchange needs posed intricate challenges. The technologies necessary for realizing these requisites within a unified CBDC platform were equally intricate, warranting further investigation.
In their comprehensive report, the Reserve Bank of Australia also expounded that an Australian CBDC could underpin electronic payments and enable more intelligent transactions. These transactions could encompass complex scenarios, rendering them more cost-effective and less risky.
Last year, the research initiative was initiated by the RBA in collaboration with the Digital Finance Cooperative Research Centre (DFCRC). The DFCRC, a program valued at 180 million Australian dollars (equivalent to US$124.3 million), draws funding from industry collaborators, universities, and the Australian Government. Its establishment was driven by the objective of exploring the potentials stemming from asset digitization and the use cases of CBDC.