While the RBA believes that the case for issuing a Central Bank Digital Currency (CBDC) for use by households has not been established, it did weigh the option of issuing a CBDC for wholesale market participants in specialised payment and settlement systems. 

The RBA’ s proposed CBDC would be a form of stablecoin, denominated in the sovereign currency and convertible at par with other forms of money. 

The RBA noted a number of potential benefits, including increased speed and robustness of payments and the possibility of building “programmable money” – that is, digital money with conditions attached to how it can be spent or transferred. A CBDC could also create “atomic transactions”, wherein all parts of a transaction are executed or none are, further reducing settlement risk. 

The RBA also revealed that it had developed a proof of concept of a wholesale settlement system running on a private, permissioned ethereum network. 

The proof of concept simulated the issuance of central bank-backed tokens to commercial banks in exchange for exchange settlement account balances, the exchange of these tokens among the commercial banks, and their eventual redemption with the central bank.

The RBA intends to extend the research with one or more external partners.