At the 2017 Australian Payment Summit, the Governor of the RBA, Philip Lowe, delivered a speech addressing whether the RBA intends to issue a digital form of the Australian dollar. Terming it an eAUD, the Governor asserted that the RBA had no immediate plans to issue an eAUD, but indicated that the RBA would continue research into the area. Notably, the Governor highlighted ongoing examination of the use of a central-bank issued digital dollar in relation to settlement arrangements. Key insights included:
- There has been a significant shift towards electronic payments which will continue to be driven partly by the increased use of mobile payment apps. However, banknotes will not be replaced entirely and are likely to remain the payment instrument of choice for many people.
- It is likely that the shift towards electronic payments will be promulgated by the banking system. The substantial investment by Australian financial institutions in the New Payments Platform (NPP) was seen as evidence that the banking system will continue to provide the infrastructure for electronic payments. However, this trend is not a given and requires financial institutions to offer customers low-cost solutions with expanding functionality over time. The rise of new technology used for payments, such as cryptocurrencies, may challenge the role of traditional financial institutions.
- An electronic form of banknotes could exist in conjunction with the electronic payment systems operated by the banks, however the case for this has not yet been proven. If an eAUD was to become a commonly used payment method, it should be issued by the RBA and distributed by financial institutions, rather than being issued by the private sector. With the NPP coming into effect, there would be little additional benefit from issuing electronic banknotes and there was not yet a public policy case for such a change.
- There was no case for the RBA to encourage the shift to electronic payments by offering every Australian an exchange settlement account. If the RBA did go down this route, it would find itself in direct competition with the private banking sector in both deposits and payment services.
The possibility was left open to the RBA issuing a new form of digital money through a variation on the exchange settlement account. This could be implemented on distributed ledger technology and be used within specific settlement systems.