Australia's central bank seeks feedback on wholesale CBDC, tokenized markets

The Reserve Bank of Australia has launched a consultation on Project Acacia, exploring wholesale central bank digital currency and tokenized asset markets.

Australia‘s central bank, the Reserve Bank of Australia, alongside the Digital Finance Cooperative Research Centr is seeking public feedback on Project Acacia, a three-year initiative that explores the benefits of tokenizing assets and using a CBDC for their settlement.

In a press release on Nov. 8, the RBA said stated that the consultation paper seeks expressions of interest from industry participants for an “experimental research phase” of Project Acacia and for joining an Industry Advisory Group for the project. The central bank is also requesting feedback on the technical and functional capabilities of new settlement infrastructure and digital money, including “wholesale CBDC and tokenized bank deposits,” as mentioned in the press release.

Brad Jones, assistant governor at the RBA, highlighted the potential of tokenized markets, stating that they could play a significant role in “improving the efficiency and resilience of wholesale payments and settlements, and in enhancing cross-border payments.” The central bank has invited interested parties to submit their feedback by Dec. 11.

What’s Project Acacia

Project Acacia was introduced by the RBA and DFCRC in September to examine how digital currencies, including a wholesale CBDC, can support tokenized asset markets. The project will focus on the settlement of tokenized assets using a CBDC and the necessary infrastructure for this process.

It is assumed that the project could save Australia’s financial markets up to $4 billion annually by tokenizing assets and streamlining their settlement through a state-backed digital currency. The project also investigates the potential of a wholesale CBDC to enhance cross-border payments by reducing reliance on intermediaries and lowering costs.