A majority of central banks across the globe are scrambling to develop a digital currency for use, but one country has stepped out of the race for now – Australia. According to local media outlet The Australian, the Reserve Bank of Australia (RBA) does not see an imperative need for a Central Bank Digital Currency (CBDC) and no pressing use cases which require the digital AUD.
The RBA argues that while it is true that the use of physical banknotes by Australians are declining as they shift towards electronic payments, cash is here to stay. Moreover, no other country in the world has truly reflected the success of a CBDC, which requires immense technical adjustments to work.
“The introduction of a CBDC would represent a change to a significant element of Australia’s monetary system and could have effects on the structure of the financial system and financial stability, so it would be relevant to the Bank’s responsibility for maintaining monetary and financial stability,” the RBA stated.
The World Economic Forum (WEF) published a handbook back in January to provide an overarching framework on CBDC development, noting that not all countries and economies will find CBDCs useful. What is more important is for governments and central banks to identify financial needs and gaps of their citizens and recognize the usability of a digital currency in their respective countries before embarking on the long journey to study and create one.
Several of its regional counterparts such as Singapore, Thailand, China, Japan and Korea are in differing stages of CBDC development. China still takes the lead in the race as it continues to expand the reach of its CBDC pilot testing phase to ensure that when the digital yuan is launched, every citizen within its borders will have easy and convenient access to it.