About Tokenised Money

The landscape for payments and money is changing as new technologies emerge, and consumer preferences evolve. The RBA is actively monitoring these developments, to ensure that Australia’s monetary and payment arrangements remain fit for purpose. Our work focuses on understanding the opportunities and risks that come with tokenised money, how it can complement existing forms of money and payments, and support responsible innovation at scale.

Tokenised money is currency represented as tokens. Unlike traditional account balances, these tokens can support innovative functionality, such as programmability, where financial transactions are automatically executed when predefined conditions are met. Tokenisation can also enable faster, 24/7 settlement, allowing transactions to be finalised in near real time. Shrinking the gap between the point of transaction and the point of settlement reduces settlement risk and can free up collateral. Importantly, tokenised money is a foundational component of tokenised asset markets, providing the means to settle transactions involving tokenised assets such as bonds, securities and money market funds.

Differences between types of tokenised money
Table comparing four types of tokenised money in Australia: tokenised reserves, retail CBDC, stablecoins and tokenised deposits. The table outlines who can access each type, what it can be used for, who issues and distributes it, and its current status. Tokenised reserves are issued and distributed by the RBA for wholesale financial institutions and are used for interbank and securities settlement. Retail CBDC is issued by the RBA, distributed by the private sector, and could be used by households, businesses and payment service providers for everyday payments and transfers. Stablecoins are issued and distributed by the private sector for payments and transfers, including overseas transactions. Tokenised deposits are issued by commercial banks and could support both retail payments and wholesale financial market transactions. The status of each initiative ranges from research and monitoring to available.

Some examples of tokenised money include:

  1. Tokenised central bank reserves: Tokenised reserves, sometimes referred to as wholesale central bank digital currency would be a form of tokenised money, issued by the RBA, that is accessible to a limited range of wholesale market participants such as financial institutions and other large institutions. It would be designed for use in wholesale payment and settlement systems. The RBA has not made any decision on issuing tokenised reserves. Following the outcomes of Project Acacia, our research on tokenised reserves is focused on supporting the development of wholesale tokenised asset markets in Australia.
  2. Retail CBDC: A retail central bank digital currency, or ‘retail CBDC’, would be the only form of tokenised money that is both issued by government (via the RBA) and can be used for both online and in-person transactions between consumers and businesses. A retail CBDC is, for the most part, a digital version of cash. It could be accessed through a phone app or a digital wallet. Following research and public consultation, the RBA has determined that there is currently no public interest case to issue a retail CBDC in Australia. We continue to monitor developments both domestically and abroad, in case this situation changes.
  3. Tokenised deposits: A tokenised deposit is a digital representation of commercial bank deposits, where the token represents a claim on the bank’s balance sheet. Project Acacia found that tokenised deposits could play a role in the development of tokenised finance, by combining the technological capability of tokenised money with the trust and stability of the two-tier monetary system. The RBA will continue to examine the potential role of tokenised deposits in tokenised financial markets, including through its participation as an observer on the industry-led Deposit Token Working Group.
  4. Stablecoins: Stablecoins are a type of tokenised money issued by private sector entities and denominated in a fiat currency. They are designed to maintain a stable value through backing by specific assets or a basket of assets. The RBA is monitoring developments in stablecoins to better understand their role alongside existing and emerging forms of money, including other tokenised payment instruments.

The RBA also contributes to international work relating to tokenised money through its participation in BIS-led research and policy initiatives. These projects bring together partner central banks to explore common challenges and multi-jurisdictional issues, especially as they relate to cross-border payments. More information on the RBA’s participation in these projects can be found under publications.