CBA anticipates mass market adoption of a central bank digital currency in Australia is still “some years away”, owing to complexities with the technology and regulation.
Head of blockchain and digital assets Sophie Gilder told the Sibos 2022 conference that CBA is “working closely with the central bank in Australia in terms of what a CBDC could look like.”
“We’re some years away from wide adoption of [CDBCs] because it is a complex area and central banks need to be measured in their implementation,” Gilder said.
“It’s not a space where you’re going to see moving fast and breaking things. That would not be appropriate, so it will take time.
“We also don’t yet know what the format of CBDCs will be. They may have certain limitations in terms of how much any individual or corporation can hold. They may have limitations in terms of global interoperability.”
Gilder has previously called out the “huge potential” of CBDCs “to remake what you can do in financial services”.
The form factors chosen for future CBDCs will also impact potential use cases, Gilder said.
She indicated there were outstanding issues, for example, with stablecoins as a form factor.
“The biggest problem is lack of clarity in terms of regulation,” she said, which “may impact who can issue a stablecoin, who can hold a stablecoin considering regulatory capital rules that have been proposed”.
“That might make it very unattractive,” Gilder said.
“There’s a lot of questions yet to be answered in the regulatory space for stablecoins to determine where will they fit and what problems can they solve.”
The Reserve Bank of Australia is working towards solving some of these issues, and has previously stated it can “see potential for well-designed, well-regulated stablecoins” in Australia.
Gilder said CBA would make good use of the “several years” it is expected to take to create a viable CBDC offering, to prepare for its eventual arrival.
As it continues working with the central bank, CBA will also be looking to identify gaps in the current economy digital assets could fill.
Gilder also said that CBA remains in discussions with regulators regarding a cryptocurrency trading pilot, which it hopes to re-launch by the end of the year.