RBA Considers Central Bank-Backed Stablecoins for Tokenized Transactions

The Reserve Bank of Australia (RBA) is considering using central bank reserves to settle tokenized transactions on distributed ledgers. This would involve synchronizing DLT platforms with existing RTGS systems, such as RITS and FSS.

One key aspect of the proposal is the use of stablecoins backed by central bank money for their reserves. The RBA's thinking is informed by Project Acacia, a tokenization test conducted with the DFCRC, which explored potential designs for tokenized reserves.

In the project's stablecoin discussion, issuers expressed a desire to use central bank reserves to back their wholesale tokens. However, it's unclear whether future central bank access would be limited to wholesale stablecoins.

One example from Project Acacia highlights the challenge: Forte had a contractual arrangement with a bank to hold central bank reserves equivalent to deposited funds, but there was no legal separation between Forte's backing and the bank's own reserves.