council of financial regulators is continuing to review the regulatory treatment of different types of crypto - assets, including stablecoins. this is in line with the senate select committee's view that we need a regulatory framework that better accommodates the various new digital assets. as i said earlier, if stablecoins and other types of privately issued digital payment tokens are to become more widely used for everyday payments, they need to be subject to a clear and effective regulation than encourages innovation and mitigates against risks to users and the financial system. conclusion to conclude, our payments system is changing quickly. both the regulators and the government understand this and are seeking to put in arrangements that encourage innovation and competition and make sure we have a secure and efficient system. we have work to do here, but are moving in the right direction. auspaynet is a valuable partner in this work and plays an important role in the governance of the australian payments industry. i look forward to continuing the cooperation between auspaynet and https : / / www. rba. gov. au / speeches / 2021 / sp - gov - 2021 - 12 - 09. html 8 / 9 payments : the future? | speeches | rba the reserve bank as we grapple with the challenges ahead and seize the opportunities offered by new technologies. thank you for listening and i am happy to answer some questions. endnotes [ * ] i would like to thank my colleagues in payments policy department for assistance in the preparation of this talk. the government's trusted digital identity framework and the private - sector trust id framework. for more details, see < https : / / www. fsb. org / 2020 / 10 / enhancing - cross - border - payments - stage - 3 - roadmap / >. this facility would have inbuilt kyc compliance workflows that ensure entities using the facility can perform kyc compliance checks to a high standard and can demonstrate this to banks and regulators. the materials on this webpage are subject to copyright and their use is subject to the terms and conditions set out in the copyright and disclaimer notice. © reserve bank of australia, 2001 – 2021. all rights reserved. the reserve bank of australia acknowledges the aboriginal and torres strait islander peoples of australia as the traditional custodians of this land, and recognises their continuing connection to country. we pay our respects to their elders, past, present and emerging. https : / / www. rba

rba, just as we issue and back australian dollar banknotes. this would be a form of retail central bank digital currency ( cbdc ) – or an eaud. i have said previously that the rba is open to this possibly. to date, though, we have not seen a strong public policy case to move in this direction, especially given australia's efficient, fast and convenient electronic payments system. it is possible, however, that the public policy case could emerge quite quickly as technology evolves and consumer preferences change. it is also possible that these tokens could offer a lower - cost solution for some types of payments than provided by the existing technologies. and, as i will discuss in a moment, there are advantages in digital payment tokens being backed by the central bank. all this means we have been continuing to examine closely the case for a retail cbdc and working with other central banks on this issue. we are working through the relevant technical issues, as well as the broader policy implications of any shift away from a payments system based on the movement of value between bank accounts, to one that uses tokens. as part of this effort, we are planning to work with australia's new digital finance cooperative research centre. we will also be working with the treasury on these issues and welcome the government's announcement yesterday. another possibility is that payment tokens are issued and backed by an entity other than the central bank, though still denominated in australian dollars. these could be a form of stablecoin. if this is how the system develops, it will be important that these tokens are backed by high - quality assets and that they meet high standards for safety and security. one reason i say this is that a lesson from history is that privately issued and backed money all too often ends in financial instability and losses for consumers. this is one reason why national currencies are today ultimately backed by the state. so if privately issued stablecoins are ultimately the way things head, it will be crucial that they meet very high standards. and if there were to be multiple stablecoins, there would be advantages in them being interoperable. the rba is working with domestic regulators and our counterparts around the world on the policy issues here. https : / / www. rba. gov. au / speeches / 2021 / sp - gov - 2021 - 12 - 09. html 6 / 9 payments : the future? | speeches | rba a third type