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APRA warns RBA over digital currency dangers
10 January 2022
AFR: The chairman of the prudential regulator, Wayne Byres, is concerned a central bank digital currency might destabilise the financial system by encouraging some customers to hold digital cash directly with the Reserve Bank instead of putting money in bank deposits.
The Australian Prudential Regulation Authority, through the Council of Financial Regulators, is studying the risks of a central bank digital currency, which would create an electronic version of Australian dollar cash issued by the Reserve Bank.
Mr Byres said APRA is “yet to see the clear economic case” for a CBDC, and it is worried about some customers bypassing banks, if they could hold digital cash in an RBA account. This could reduce the capacity of commercial banks to lend to support the economy.
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