The RBA noted that the introduction of tokenized bank deposits would represent a minor change to current practice.
The assistant governor of the Reserve Bank of Australia noted that pilot projects have highlighted several key areas where CBDCs could be of great use.The Reserve Bank of Australia is open to using a central bank digital currency as the future of money, where state-issued digital money would represent a tokenized form of central bank reserves.
Jones started his speech by outlining the use of different forms of money throughout history and how financial instruments have evolved over time. While talking about tokenization and tokenized forms of money in the modern era, Jones mentioned stablecoins and CBDCs. He stated that stablecoins issued by “well-regulated financial institutions and that are backed by high-quality assets could be widely used to settle tokenized transactions;“ however, due to lack of regulatory guidelines, stablecoins issued by private parties often come with increased risk. On the other hand, CBDCs in the form of tokenized bank deposits could become a good form of transaction settlement, according to Jones.
The assistant governor added that introducing tokenized bank deposits would represent a minor change to current practice given that deposits issued by various banks are already widely exchanged and settled across the central bank balance sheet. A payment between two parties using tokenized deposits would still be settled via a transfer of exchange settled balances between the payer and payee bank.
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