The executive leading Australia’s pilot project for central bank digital currencies (CBDCs) believes that while CBDCs may not address current problems, they could be the solution to unforeseen challenges in the future. Dilip Rao, formerly of Ripple and now heading the CBDC research project in Australia, explained that a central bank-issued digital currency could be developed for purposes that have not yet been considered. Rao, who is the research program director at the Digital Finance Cooperative Research Centre, is collaborating with the Reserve Bank to explore potential use cases for a CBDC. He acknowledged that the question of why individuals would want or need to use a CBDC is still unanswered. However, he suggested that one potential future use could involve large institutions trading tokenized assets on marketplaces, with a preference for using a CBDC to mitigate risks. The CBDC pilot in Australia is currently examining 14 possible use cases, and Rao stated that the forthcoming report on these tests will identify which use cases warrant further investigation. He emphasized that a CBDC is not necessary for every use case and that widespread adoption would depend on people seeing value in it. One obstacle to implementing a CBDC in Australia, according to Rao, is the need for legislative changes that require public support. To gain the backing of politicians, it would be necessary to engage in extensive public consultation to address the problems that people want solved.
Australia's CBDC lead focuses on addressing future challenges, not current issues