Michele Bullock became Governor of the Reserve Bank of Australia in mid September. During a recent interview, she spoke about central bank digital currency (CBDC). She said the recent CBDC pilots reinforced the central bank’s stance that wholesale CBDC would be the next focus. In particular, where a CBDC can support tokenization.
In August the central bank and Digital Finance Cooperative Research Centre (DFCRC) released the results of 16 CBDC pilots spanning wholesale and retail use cases. “This is why we’re embarking upon this next step of looking at tokenised assets,” said Governor Bullock talking about the pilot findings.
“If you tokenise assets, put them on the ledger, can you use CBDC to make that a much more efficient and safer settlement process. For me, the thing that came out of that particular experiment of all the case studies was that that’s a sensible next direction in which to take this,” said the Governor.
She added that retail CBDC will not be a focus for the central bank for “the next little while.”
Asked about whether Australia is planning a regulatory sandbox, Governor Bullock acknowledged that the CBDC pilot raised several regulatory issues. However, she said a sandbox is not imminent as the topic only recently came up in discussions. It’s something they are talking to the Treasury about.
Governor Bullock also clarified the Reserve Bank of Australia‘s general position. “We don’t like to regulate if we can avoid it, we would rather stand out and let the industry do it itself.” She gave the example of Australia’s faster payment system NPP.
The new Governor has spent her entire career at the central bank. Hence, it’s not surprising she has a consistent stance of leaning towards wholesale CBDC. As Deputy Governor she was responsible for a 2021 wholesale CBDC proof of concept, Project Atom, for asset tokenization.