being conducted with the bis innovation hub and three other central banks – to explore the possible use of cbdc in cross - border payments. the regulatory environment i would now like to move to the regulatory challenges posed by this fast moving world of payments. with so much change taking place, regulators and the payments legislation can't stand still. the digital economy is very important to australia's future and we need a regulatory system that encourages innovation and ensures the system is safe and stable. given this, the rba welcomes the government's response announced yesterday to three recent reports : https : / / www. rba. gov. au / speeches / 2021 / sp - gov - 2021 - 12 - 09. html 7 / 9 payments : the future? | speeches | rba the treasury review of the australian payments system led by scott farrell. the report of the select committee on australia as a technology and financial centre. the parliamentary joint committee's report on mobile payment and digital wallet financial services. there will be a lot of work for the treasury and the other council of financial regulators agencies to implement the recommendations that have been accepted by the government. i can't do justice to all the issues here but will touch briefly on some that relate directly to the bank's responsibilities. the government's support for developing a strategic plan for the payments ecosystem is a positive step. because payments systems are networks there is a need for coordination, which can be challenging amongst competitors. the payments system board sees part of its role as helping overcome these coordination challenges. yesterday's announcement by the treasurer will also help here. the rba also supports the decision to introduce a new, tiered licensing regime for payment service providers. this should help encourage innovation and competition while promoting safe and resilient payment services. as part of this, we are keen to see the implementation of a new licensing framework for stored - value facilities, based on the model proposed by the council of financial regulators a few years ago. we are also pleased to see the government's support for reviewing the payment systems ( regulation ) act 1998 to make sure it is fit for purpose. the payments ecosystem is becoming more complex and there are many more entities in the payments chain than there used to be. if the rba is to meet its broad mandate to promote competition, efficiency and stability then we need to modernise the definitions that were included in the legislation more than two decades ago. finally, i also want to note that the

an approach unambiguously geared to price stability. at the same time, the set of monetary policy instruments was brought more closely into line with market conditions, and interest rates in the financial markets as well as cross - border capital transactions were liberalised. this sea change in monetary policy was accompanied by a general reorientation of economic policy which compelled the government to concentrate on its primary functions, thus creating greater scope for the development of market forces. this reorientation of monetary policy has not been without success. during the past twenty years, inflation has been reduced to a much more acceptable level in the industrial countries, thus making it possible to speak at least virtually of price stability in the majority of countries. over the past few decades there has arisen an international consensus about monetary policy that is geared to price stability. the evident success of such a policy in the nineties paved the way for a single monetary policy in europe. as a result, with the start of european monetary union at the beginning of 1999 the conditions for tension - free broad - based growth have improved. the experience of german monetary policy and that of other central banks has taught us that, besides the unambiguous commitment to the objective of price stability, the independence of the monetary policy decision - makers is a basic precondition for that success. independence means, first of all, that the central bank is independent of the government in formal terms with regard to the deployment of its monetary policy instruments. the maastricht treaty provides the european system of central banks with an even greater degree of independence, in fact, than was stipulated earlier by the legislators of the bundesbank act. the central bank ’ s formal independence of the government has to be accompanied by material independence which ensures that the monetary policy decision - makers can take their decisions in isolation from the interests of the government. for that reason, the agreements on european monetary union provide for terms of office for the ecb ’ s management that are of adequate length and rule out premature dismissal. furthermore, the independence of monetary policy in europe is protected by the maastricht treaty prohibiting the ecb from financing budgetary deficits and by the fact that the exchange - rate arrangements of the governments are clearly subordinated to the primary objective of price stability. after roughly 18 months, in which responsibility for monetary policy has resided with the european central bank, it is undoubtedly still too early for an overall assessment. however, the fact that the changeover to the euro took