Retail Central Bank Digital Currency

What is a retail central bank digital currency (CBDC)?

A retail central bank digital currency, or 'retail CBDC', would be the only form of money that is both issued by government (via the RBA) and can be used for both online and in-person transactions between consumers and businesses. A retail CBDC is, for the most part, a digital version of cash. It could be accessed through a phone app or a digital wallet.

A retail CBDC would not replace cash. The RBA would continue to provide cash as it does now. Instead, a retail CBDC would provide Australians with a new way to pay, in addition to existing payment options.

Why we are interested in Retail CBDC

Making payments has become more convenient following the rise of electronic payment methods. At the same time, cash transactions have declined over time (Graph 1). This suggests that the payment needs of the Australian public may be changing. As payment preferences become more digital, the RBA is exploring how the money it issues to the public could be modernised.

A Retail CBDC could also potentially support a number of the RBA’s policy objectives, including safeguarding public trust in money and promoting efficiency, safety, resilience, and innovation in payment systems.

The RBA is also considering whether there would be value in the introduction of a ‘wholesale’ form of CBDC, which would be restricted to transactions between large financial entities.

Where can I find further information?

The Bank continues to undertake research into the costs and benefits of a retail CBDC.