Reserve Bank hints at its own digital currency

Reserve Bank hints at its own digital currency

In a conference speech today, Reserve Bank Governor Dr Philip Lowe said the central bank is considering its own digital currency.

In his remarks to the Melbourne Business Analytics Conference, Dr Lowe was more open than in the past about the potential for a central bank digital currency.

“The RBA is conducting research on the technologies and policy implications of a potential wholesale central bank digital currency,” he said.

“This could use distributed ledger technology to support the settlement of transactions in the interbank payment system.

“Some of this work is taking place in the RBA’s in-house Innovation Lab, where we are collaborating with external parties on a proof-of-concept.”

This is in contrast to an RBA  December 2019 submission to a Senate Select Committee in which it said, “The Bank is not currently considering a CBDC [central bank digital currency] for retail use, but notes the availability of a wholesale settlement token based on distributed ledger technology could allow payment and settlement processes to become more integrated with other business processes”.

This morning, Dr Lowe was also supportive of the consumer data right and open banking, despite slow uptake due to significant administration costs and red tape.

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