Australia’s Central Bank Explores Potential Savings through Tokenisation


Summary: Australia’s central bank is considering the use of tokenised money to save billions of dollars in costs in the domestic financial market. The Reserve Bank of Australia (RBA) is studying the possibility of launching a central bank digital currency (CBDC) and exploring how different forms of digital money and infrastructure can support the development of tokenised asset markets. The RBA is open-minded about the functional forms of digital money that can best support the Australian economy.

Australia’s central bank, the Reserve Bank of Australia (RBA), is conducting research to determine the potential benefits of using tokenised money in the country’s financial markets. Assistant Governor Brad Jones highlighted the possibility of saving around A$13 billion ($8.20 billion) per year through increased liquidity and transaction efficiencies in capital markets. In addition, the RBA believes that A$1 billion to A$4 billion could be saved in transaction fees through increased trading volumes and the benefits of atomic settlement, especially for cross-border payments.

Australia’s government is also taking steps to regulate cryptocurrencies and digital assets. Platform operators will be subject to existing Australian financial services laws and will need to obtain an Australian Financial Services Licence. The regulations will cover areas such as holding tokens, custody software standards, and standards for transacting in tokens.

The RBA’s research on tokenisation is part of its wider exploration of a central bank digital currency (CBDC). A wholesale CBDC is seen as a potential complement to privately issued digital currencies, such as tokenised bank deposits and asset-backed stablecoins. By exploring different forms of digital money and supporting infrastructure, the RBA aims to better support the Australian economy in the digital age. A joint report from the RBA and Treasury will be released in mid-2024, providing an update on CBDC research in Australia and outlining a roadmap for future work.

Tags: Reserve Bank of Australia, tokenisation, central bank digital currency, financial markets, regulation, liquidity, transaction efficiency, digital money, cryptocurrencies, CBDC research