Australia to Prioritise Wholesale CBDC Over Retail

As a seasoned researcher with a focus on digital currencies, I find Australia’s decision to prioritize a wholesale central bank digital currency (CBDC) over a retail version quite intriguing. Having spent years immersed in the world of finance and technology, I can appreciate the strategic thinking behind this move.

The Australian Reserve Bank has indicated that they will focus more on developing a central bank digital currency for use among institutions (wholesale) rather than for individual consumers (retail).

A wholesale Central Bank Digital Currency (CBDC) represents a digital coin issued by central banks that’s primarily used by financial institutions and banks, whereas retail versions are designed for individual consumers and everyday purchases. Across the globe, many countries have been considering implementing CBDCs; this has been observed in all G20 nations according to the Bank for International Settlements.

In a statement issued on Wednesday, Brad Jones, the assistant governor of financial systems, announced that the Reserve Bank of Australia (RBA) has decided to focus its strategic efforts on developing wholesale digital currency and infrastructure, including wholesale Central Bank Digital Currencies (CBDC). Currently, the RBA believes that the potential advantages of a wholesale CBDC outweigh the difficulties compared to a retail CBDC, finding the former more promising.

For quite some time now, Australia has been investigating potential applications of Central Bank Digital Currencies (CBDCs). In a recent report released on Wednesday, the central bank stated that they have yet to find a compelling advantage for a retail CBDC as citizens already receive satisfactory service from the existing retail payment system.

Despite this, the RBA and Treasury maintain their willingness for this evaluation to evolve with time, as more information about the pros and cons becomes clear, not only globally but also within our own country.

As a crypto investor, I’m thrilled about the three-year research initiative my country is embarking on regarding the future of digital currency within Australia. Next month marks the public debut of Project Acacia, spearheaded by our central bank. This project aims to delve into potential enhancements for wholesale markets using central bank money, leveraging tokenization and innovative settlement systems. The report hints at exciting prospects ahead!

In his address, Jones emphasized that our top current goal is to initiate a fresh project involving industry collaboration on central bank digital currencies (CBDC) and tokenized commercial bank deposits. The main aim here is to gain insights into how innovative database structures and ideas such as ‘programmability’ and ‘atomic settlement’ in tokenized markets could potentially bring advantages to the Australian financial system and overall economy.

In 2025, both the Reserve Bank of Australia (RBA) and the Treasury plan to engage with the public about a potential Central Bank Digital Currency for retail use. They will also continue research and experiments on this topic over the subsequent years. A new paper from the RBA and Treasury, discussing the benefits and possible design of such a currency, is expected to be published in 2027.