A report on 14 pilot CBDC projects concluded an eAUD may lift the “efficiency and resilience” of the payment system but many questions remain unanswered.
A CBDC could be used by industry to improve the payments system.The Reserve Bank says a central bank digital currency could increase “efficiency and resilience in some areas of the payments system”, but warned more research is required to deal with a swathe of legal, regulatory, technical and operational issues to ensure any eAUD operates safely.
Brad Jones, RBA assistant governor, said on Wednesday that alongside other innovations in digital money, a CBDC “could potentially unlock benefits for the Australian financial system and the wider economy”.The report said the pilots “highlighted a range of areas where a CBDC could enhance the functioning of the payments system”.
These include questions about the legal underpinnings of a CBDC, the underlying technologies, and, by helping to create new types of business models, changing the nature of some risks in the financial system that will require adjustment to other regulatory frameworks. This includes settlement of big trades, which currently suck up large amounts of capital and collateral. CBDC can be used to settle end-of-day balances between banks, using blockchain technology. Blockchain is new financial market infrastructure that moves value and payments around in the economy;
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